Fonterra's 'significant' upgrade happy surprise for NZ's market

The death today of Queen Elizabeth II – Britain’s oldest and longest-reigning monarch – brought tributes from across the world, but stock and currency markets globally remained largely unchanged.

Friday, September 9th 2022, 5:59PM

by BusinessDesk

Peter McIntyre from Craig’s IP said it had been another quiet day for New Zealand’s market, rounding off a sluggish two weeks.

The S&P/NZX 50 Index rose 79.8 points, or 0.68%, to 11,757.77. Turnover was $99.3 million.

McIntyre said the big market news of the day was dairy co-op Fonterra announcing it had increased its forecast earnings guidance for the 2022-23 season.

The dairy co-op told the NZX this morning it had revised its 2023 forecast earning guidance to between 45 to 60 cents per share – up from 30 to 45 cents per share.

McIntyre said it was a “significant” upgrade per share and it had come as a bit of surprise to the market, as reflected in a jump in price.

Fonterra Shareholders’ Fund Units were up 5% to $3.15 in early morning trading and ended the day up 4.3% to $3.13 – 13 cents higher than yesterday.

Casino and hotel operator SkyCity Entertainment was up 1.1% to $2.82 even though the Unite union says thirty of its cleaning and security staff are planning to walk off the job tonight.

This is due to 99.8% of its membership voting in favour of ‘escalated’ strike action, after an impasse in wage negotiations – on top of the union saying that SkyCity’s chief executive's salary had jumped from $945,000 to $1.5m.

Global cinema software provider Vista Group was down 1.2% to $1.60 after it was revealed its customer Cineworld – the world’s second-largest cinema company – filed for bankruptcy in the United States as it struggled to manage huge debts left over from the pandemic.

The British-based theatre chain has almost 750 sites around the world and the news comes just days after Vista Group reported a 39% increase in half-year earnings as people started heading back to the movies.

Index heavyweight Fisher & Paykel Healthcare was up 1.4% to $20.20 today. McIntyre described the stock as the “story of the week” due to the health manufacturer trading such an extensive amount of volume this week.

Other index heavyweights like Mainfreight were flat today at $73.50 per share. Another NZX-listed logistics firm Freightways was up by 2.3% to $10.65, while Move Logistics shares were also flat at $1.30.

Retail personal non-bank lender Harmoney told shareholders this afternoon that it plans to apply to delist from the main board of NZX and consolidate its listings on the ASX.

The company said in its statement the Harmoney board had determined that maintaining a dual listing on the ASX and NZX was “no longer in the best interest of its shareholders” due to low levels of the stock’s liquidity on the NZX.

Harmoney was up 1.3% to 76 cents in very light volume by the end of the day.

General insurer Tower rose 2.5% to 62.5 cents after announcing it had signed a new partnership agreement with real estate group Ray White.

The two businesses will offer Tower’s insurance products and digital customer services to Ray White’s customers via its new Concierge insurance and moving solutions offering, the company said.

On the currency front, the NZ dollar was trading at 61.10 US cents at 5pm in Wellington, up from 60.52 US cents yesterday.

Electus Financial managing director Alex Hill said currencies globally hadn’t shifted significantly after the news of the Queen’s death.

He said everyone would be watching the NZ dollar come Monday morning to see if the Kiwi managed to climb above the 61.50 US cents mark.

“If it does, that would then give us potential from a technical perspective to maybe climb as high as 63 to 64 US cents next week,” he told BusinessDesk.

“But that will all depend on where it finishes the week, and it has to be north or south of 61.50 US cents.”

Tags: Market Close