Spark New Zealand climbed 4.3% after Forysth Barr analysts upgraded the country’s biggest telecommunications company, saying investors are already pricing in a lower dividend.
The telco gained 8.5 cents to $2.065 on a volume of 9.6 million shares after Forysth Barr’s Aaron Ibbotson and Benjamin Crozier lifted their rating to outperform from neutral, with its recent slump in share price indicating that the board can cut the dividend without spooking investors further.
“The board and management should have received a strong enough signal that the market has lost confidence in the dividend to act decisively,” the analysts said in a note to clients.
Spark’s other issue is its unfunded data centre expansion plan, which Forsyth Barr’s Ibbotson and Crozier said can be addressed in several ways. Their favoured option is an outright sale, which they estimate could go for $700 million.
Separately, global heavyweight investor BlackRock increased its stake in Spark to 8.1% from 5.9%.
The telco paced gains on the S&P/NZX 50 index, which advanced 56.3 points, or 0.5%, to 12,184.51, following a strong lead from Wall Street as investors breathed a sigh of relief over the prospect of narrower reciprocal tariffs when the White House reveals its next leg on April 2.
“We’ll take that after five down weeks in a row, which is the worst losing streak since 2023,” said Mark Lister, investment director at Craigs Investment Partners.
Tech leaders
Wall Street was led higher by the tech-heavy Nasdaq Composite, with that upbeat sentiment following through to the antipodes. Across the Tasman, Xero was up 1.2% in late trading, while WiseTech advanced 2.7%.
On the NZX, travel software firm Serko gained 2.4% to $3.89 and Gentrack increased 0.5% to $10.63, while Vista Group International fell 0.8% to $3.76. Fisher & Paykel Healthcare gained 1.4% to $33.06.
Retailer Warehouse Group led the benchmark index higher, climbing 5.8% to 99 cents on a modest volume of 123,000 shares and bouncing back from last week’s record low, while Vulcan Steel climbed 5.3% to $9.02.
KMD Brands rose 2.8% to 37 cents ahead of its first-half result on Wednesday.
Synlait Milk extended its decline, falling 12% to 79 cents and adding to its 11% slide on Monday. The milk processor reported a return to profit when announcing its first-half result yesterday, but investors are wary of its outlook.
Fonterra Shareholders’ Fund units were unchanged at $5.90, while The a2 Milk Co decreased 0.6% to $8.74.
Ryman Healthcare posted the biggest decline on the benchmark index, falling 3.8% to $2.51, its lowest level on an adjusted basis in 13 years.
The kiwi dollar was little changed at 57.22 US cents at 5pm in Auckland from 57.17 cents at 7am and 57.20 cents yesterday.
Reporting by Paul McBeth. Image from Curious News.
