The Fonterra Shareholders’ Fund climbed to its highest level in almost 12 years, while Synlait Milk sank after highlighting a tougher second half to its financial year, in relatively modest trading today.
The S&P/NZX 50 index increased 14.67 points, or 0.1%, to 12,128.21. Trading was quiet with a turnover of $98.1 million across the main board, following heavy volumes on Friday when index-tracking investment funds tweaked their portfolios to match the new index weightings.
The Fonterra fund rose as high as $6.04 – the highest on an adjusted basis since October 2013 – and ended the day up 1.7% at $5.90.
“It’s only a couple of years since they traded with a $2 handle,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene. “People are eyeing up the consumer brands business and the large amount of capital expected to be returned.”
Still, Sullivan pointed out that the high farmgate milk price was an input cost for Fonterra and would ultimately weigh on earnings.
Meanwhile, Synlait Milk sank 11% to 90 cents after returning to profit and pipping its first-half earnings guidance. Sullivan said the second-half outlook was a little grimmer than investors had hoped.
“The final run rate and the speed of recovery are expected to slow,” he said. “All those business risks haven’t gone away.”
Power up
The major energy companies underpinned the broader gain for the NZX50, with Meridian Energy gaining 2.3% to $5.44, Mercury NZ up 0.7% at $5.60 and Contact Energy increasing 0.9% to $8.60. Genesis Energy rose 0.5% to $2.15.
Global logistics firm Mainfreight and Fisher & Paykel Healthcare both gained amid reports that US President Donald Trump’s tariff regime won’t be as broad as first feared when the reciprocal programme is unveiled on April 2. Mainfreight rose 1.2% to $65.25 and F&P Healthcare advanced 0.2% to $32.60.
The kiwi dollar slipped to 57.20 US cents at 5pm in Auckland from 57.29 cents at 7am and 57.51 cents last week.
Sky Network Television led the benchmark index higher, up 2.5% at $2.46, while Warehouse Group increased 2.4% to 86 cents.
Property developer CDL Investments New Zealand gained 2.6% to 79 cents while Winton Land advanced 2.6% to $2 and Fletcher Building increased 0.9% to $3.30 after the government announced plans to replace consenting law to almost halve the cost of compliance.
Oceania Healthcare posted the biggest decline on the benchmark index, falling 4.7% to 61 cents, while KMD Brands fell 4% to 36 cents and Sanford declined 3.2% to $4.81.
Air New Zealand fell 0.8% to 63 cents, following international airlines lower after a fire at Britain's Heathrow Airport on Friday weighed on global travel and leisure stocks. SkyCity Entertainment Group declined 0.8% to $1.26 and travel software developer Serko slipped 1.3% to $3.80.
Spark New Zealand slipped 1% to $1.98 on a volume of 3.6 million shares.
Reporting by Paul McBeth. Image from Ryan Song on Unsplash.
This story has been updated to correct CDL Investment's name.
