Fonterra Shareholders’ Fund units led New Zealand’s benchmark stock index higher as the dairy cooperative raised its earnings guidance and kicked off a roadshow shopping its consumer business to potential investors if it goes ahead with a listing of the unit.
The S&P/NZX 50 climbed 116.19 points, or 0.9%, to 12,515.97. Turnover was $142.9 million across the main board.
The Fonterra fund climbed 5% to $5.45 after the world’s biggest dairy exporter raised its annual earnings guidance to between 55 and 75 cents per share from a 40-to-60 cents range as its core ingredients business continued to perform and the consumer business, poised to be sold, widened its margins.
Fonterra kicked off a roadshow across New Zealand, Australia and Asia where it’s showcasing its Mainland Group consumer business to potential investors as it considers whether to sell the arm in a trade sale or pursue an initial public offering.
“The Mainland Group is going to be an interesting one to watch and it would be great if they go with an IPO,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene. “A $3-to-$4 billion deal wouldn’t be out of the question.”
Synlait Milk gained 6.7% to 97 cents while NZX declined 0.6% to $1.60.
Markets across Asia were mixed as investors digested US President Donald Trump’s refusal to predict whether the world’s biggest economy will slip into recession as a result of his tariff regime. Australia’s S&P/ASX 200 index gained 0.2% in late trading and Japan’s Nikkei 225 was up 0.5%, while Hong Kong’s Hang Seng dropped 2.1%.
“It’s pretty hard to predict what’s happening with the tariffs and that uncertainty has people wondering whether it will tip the US economy into a Trumpcession,” Sullivan said.
Fisher & Paykel Healthcare, which has manufacturing operations in Mexico, gained 1.5% to $35.03 while global logistics group Mainfreight climbed 2.9% to $69.89.
To the rescue, here I am
“I think the Fed will come to the rescue if things get too dire,” with markets pricing in three cuts by the Federal Reserve this year, he said.
The kiwi dollar traded at 57.12 US cents at 5pm in Auckland from 57.09 cents at 7am and 57.17 cents last week.
The a2 Milk Co rose 1% to $8.976 after being tapped to join the S&P/NZX 10 index later this month, replacing Ryman Healthcare, which increased 0.3% to $3.03, still below the $3.05 offer price of the retail component of its $1 billion capital raising which closed today.
KMD Brands advanced 1.3% to 38.5 cents Tourism Holdings gained 1.7% to $1.85 after the index reweightings will see them leave Australia’s All Ordinaries later this month, while newcomers Santana Minerals was unchanged at 67 cents and Vista Group International increased 0.8% to $3.71.
Spark New Zealand was the most heavily traded stock on a volume of 4.5 million, gaining 1.4% to $2.24.
Tower posted the biggest decline on the top 50 index, falling 2.5% to $1.425, as Australian insurers rebounded on the ASX after their selloff during Tropical Cyclone Alfred’s devastation on that nation’s coastline.
Oceania Healthcare slipped 1.5% to 66 cents and Warehouse Group declined 1.1% to 92 cents.
T&G Global fell 1.8% to $1.60 in thin trading after appointing Baywa’s head of portfolio management and mergers and acquisitions Philipp Trachtenberg to its board.
On the Snowball Effect platform, Glory League Stats extended its crowdfunding equity raising, which is open for another two weeks. The automated video engagement platform operator is just over halfway to its minimum target of $800,000.
Reporting by Paul McBeth. Image from Erwan Hesry on Unsplash.