Synlait leads NZ shares higher

New Zealand shares edged upwards with the embattled Synlait Milk leading the market higher as it continues to recover from its lows.

Friday, June 4th 2021, 9:41PM

by BusinessDesk

The S&P/NZX 50 Index rose 66.29 points, or 0.5%, to 12,496.27. Within the index, 22 stocks fell, 26 rose, and two were unchanged. Turnover was $173.4 million.

Milk processor Synlait Milk rose 5.5% to $3.44 as investors saw value in the company’s deflated share price. A2 Milk was unchanged at $6.10, both are down more than 30% this year.

Z Energy rose 2.7% to $2.65 today. Forsyth Barr analysts pointed to the stock as one of the earnings season success stories, with the stock outperforming the market by as much as 10%.

The broker’s analysis of the recent earnings season showed mixed results. Eight companies reported higher earnings per share than forecast, six were below expectations and five were in line with predictions.

Market reaction was similarly mixed with an even split between the number of stocks over and underperforming the market, the analysts said.

Other top performers today included Fletcher Building which rose 2.5% to $7.85, Contact Energy, up 2.3% at $8.01, and SkyCity Entertainment which was up 2.2% at $3.65.

My Food Bag shares have continued to perform poorly, dropping 2.1% to $1.43 today.

Despite this, Harbour Asset Management has doubled down on its bet the company will perform. The fund manager has again raised its stake in the meal-kit company, now owning 10.3% of the entire firm.

Kathmandu posted the day’s biggest loss, dropping 3% to $1.61 as it succumbed to profit-taking after a strong run. The stock is up almost 23% year-to-date.

Napier Port also slipped 1.5% to $1.61 after being a top performer yesterday. The port has still gained 3.1% across this week.

US equity markets wobbled overnight as economic data released point to a “super-charged US recovery” causing investors to think the Federal Reserve may taper its asset-buying programme, said ASB economist Mike Jones.

A key data set, US nonfarm payrolls, will be closely watched when released on Friday night, with a 670,000 increase in jobs in May and a fall in the unemployment rate to 5.9% expected.

NZ unofficially tapered its own bond programme, planning to buy $100 million less than last week, although with reduced bond issuance the pressure being put on market prices is similar.

The economic data seen in the US prompted a sharp fall for the kiwi dollar which gave up 1% against the greenback.

The kiwi dollar was trading at 71.39 US cents at 5pm in Wellington, down from 0.7228 cents yesterday.

The trade-weighted index was at 74.40 at 5pm, from 74.97 yesterday. The kiwi traded at 93.26 Australian cents from 93.35, 78.69 yen from 79.26 yen, 58.89 euro cents from 59.22 cents, 50.64 British pence from 51.00 pence, and 4.5725 Chinese yuan from 4.6152 yuan.

Tags: Market Close