Fonterra units jump as investors wait for GDP data to drop

New Zealand’s market rose today – thanks to positive sentiment from Wall Street on Friday – while Fonterra Shareholders’ Fund units jumped for a second day on the back of the dairy co-op raising its earnings guidance last week.

Monday, September 12th 2022, 6:00PM

by BusinessDesk

The S&P/NZX 50 Index rose 55.44 points, or 0.5%, to 11,813.21. Turnover was $104.5 million.

Mark Lister, head of private wealth research at Craigs Investment Partners, said NZ’s market had another quiet day as investors wait to see what’s revealed by the gross domestic product (GDP) data to be announced this Thursday.

He told BusinessDesk that NZ would continue to stay in a “holding pattern” until more big corporate news started to filter through – using Fonterra’s earnings update last week as an example.

“Fonterra’s share price hasn't been great in recent years, so it's good that they're getting themselves back on track,” he said.

Fonterra Shareholders’ Fund units jumped 5.8% to $3.31. The dairy co-op revealed on Friday that it had revised its 2023 forecast earning guidance to between 45 and 60 cents per share – up from 30 to 45 cents per share.

Financial services firm Jarden wrote in a note today that its analysts were “cautious” about the prospects of Fonterra Shareholder Fund units despite the co-op lifting its 2023 financial year cents per share earnings outlook.

Jarden also lifted its rating from neutral to overweight. Jarden analysts said there were indications Fonterra was enjoying “supernormal” profits from non-reference products at the same time that whole milk powder prices remain at solid levels.

Genesis Energy is set to have a new high-flying chief executive come March 2023 – in the form of Christchurch International Airport’s current boss Malcolm Johns.

The energy company's chair Barbara Chapman said Johns had been appointed by the company’s board after an “extensive global search”. The stock was up 0.2% to $3 by the end of the day.

All other energy stocks were mixed today but all traded a significant amount of value by early evening. Manawa Energy was down 0.3% to $5.95, Mercury edged up by 0.1% to $6.16, Meridian Energy was also up 0.8% to $4.99. Contact Energy was down by 0.1% to $7.94.

Infrastructure group Infratil had the most value traded today, with more than $10.5m traded. The stock was down 0.5% to $9.29.

Dairy manufacturer Synlait told the NZX this morning that the company’s registration for its A2 Milk Company infant formula had been renewed until February 2023. Synlait Milk was up 1.2% to $3.52, and A2 Milk rose 2.9% to $6.40.

NZ’s largest winemaker Delegat Group was down 0.5% to $11.40 after the winemaker announced its governance succession planning changes which would be effective from today. Executive director Jim Delegat will transition to non-executive director.

The Delgat board appointed Graeme Lord – who is currently a non-executive director and has worked with Delegat Group since 1999 – as non-executive chair.

Pub owner Good Spirits Hospitality fell 9.4%, or 0.5 cents, to 4.8 cents by early evening – but on extremely light volume.

Retail personal non-bank lender Harmoney was down 4% to 73 cents. The lender told shareholders on Friday afternoon that it plans to apply to delist from the main board of NZX and consolidate its listings on the ASX.

On the currency front, the NZ dollar was trading at 61.01 US cents at 5pm in Wellington, down slightly from 61.10 US cents on Friday.

Tags: Market Close