a2 Milk jumps; Kiwi dips below 70 US cents

The New Zealand dollar dropped to a three-month low, while the NZ share market finished the day marginally higher as A2 Milk surged.

Friday, June 18th 2021, 6:08PM

by BusinessDesk

The S&P/NZX 50 Index rose 10.73 points, or 0.1%, to 12,551.93. Within the index, 22 stocks fell, 25 rose and three were unchanged.

Turnover was $424 million due to an extended trading session to allow for the quarterly rebalance of the S&P/NZX and FTSE Russell Indices.

The fallout from the US Federal Reserve’s update yesterday morning continued for a second day, with the currency falling below 70 US cents and short-term bond yields inching higher.

BNZ strategist Jason Wong said the more hawkish US central bank and strong local GDP figures suggested “emergency policy settings” were no longer required.

The kiwi hit a low of 69.92 US cents before trading at 70.05 cents at 3pm in Wellington, down from 70.96 cents yesterday.

Trading firm OFX said it was looking for signals to determine whether “this shift is part of a larger change in narrative or a knee jerk response to headline market event”.

The trade-weighted index was at 73.60 at 3pm, from 74.23 yesterday. The kiwi traded at 92.73 Australian cents from 92.95 cents, 77.18 yen from 78.52 yen, 58.79 euro cents from 59.13 cents, 50.25 British pence from 50.72 pence, and 4.5163 Chinese yuan from 4.5575 yuan.

A2 Milk led the share market higher, climbing 6.3% to $6.75, followed by Synlait Milk which was up 5.5% at $3.81.

Australian investors have been buying more A2 shares lately, Forsyth Barr analysis found their ownership of the stock increased by 1.7% during the month of May.

Investors across the ditch have also been buying Vista Group, SkyCity Entertainment and Z Energy, while selling down Air New Zealand and Serko.

Fuel retailer Z Energy jumped 2.7% to $2.65 today, after Forsyth Barr analysts said its annual shareholder meeting “hinted at an improved outlook” due to store front changes and wholesale market arrangements.

“Z indicated that if the refinery was instead an import terminal in financial year 2021 its earnings would have been $49m higher,” the analysts said.

Forsyth Barr gave the stock an ‘outperform’ rating and a $3.05 target price.

Air New Zealand dropped 0.3% to $1.62 after it gave a trading update to say its 2021 loss will not “exceed $450 million” but the airline is not expecting “any meaningful recovery in long-haul demand in the 2022 financial year”.

Oceania Healthcare posted the day’s biggest fall, down 4% at $1.44.

Tags: Market Close