Cautious start to NZ sharemarket week, Synlait and A2 tumble again

The New Zealand sharemarket began budget week on a cautious, flat note and the closely aligned companies Synlait and a2 Milk again took a tumble.

Monday, May 15th 2023, 6:33PM

by BusinessDesk

The S&P/NZX 50 Index fell at the opening and was saved by a late flourish in the end-of-day matching session. The index finished just 1.24 points or 0.01% down at 11,937.6 after reaching an intraday low of 11,882.82.

There were 78 gainers and 46 decliners on the main board, but trading was again light with 25.11 million shares worth $74.37m changing hands.

United States markets were softer as negotiations over the government’s debt ceiling continued. The Republicans are demanding a reduction in domestic spending before agreeing to raise the ceiling to US$31.5 trillion (NZ$50.6t).

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the negotiations were causing uncertainty but the Democrats and Republicans always seemed to find a way to resolve the debt ceiling.

He said the local market was not expecting miracles from the budget this Thursday, and though providing money for the cyclone rebuild efforts was necessary, it was inflationary.

“I still think the market is cautiously optimistic. We still have the hangover of rising interest rates but once we have commentary that rate rises are pausing, the market should pick up,” Sullivan said.

“There is good value on the market with a lot of stocks trading below their net tangible assets and now having attractive dividend yields of 7-9%.”

Synlait continues to be impacted by its significant earnings downgrade, falling 3c or 2.08% to a new low of $1.41. It was at $3.53 at the start of the year and has fallen nearly 55% over the past 12 months.

Global marketer a2 Milk was down 12c or 2.07% to $5.67 after last week announcing leadership changes to its United States, Australian and New Zealand, and Mataura Valley Milk businesses.

The market’s two biggest stocks, Fisher and Paykel Healthcare and Meridian Energy, were down 17c to $26.70 and 2c to $5.48 respectively. Other leading stocks Fletcher Building gained 7c to $4.85, and Mainfreight collected 31c to $70.31.

Hallenstein Glasson declined a further 17c or 2.66% to $6.23 following the rush to buy shares before it was added to the NZX top 50 last week.

Fellow retailer KMD Brands was up 2c or 1.85% to $1.10, and Michael Hill gained 3c or 2.88% to $1.07.

Freightways was down 12c to $9.22; Air NZ decreased 1c to 77c; Accordant Group declined 5c or 3.23% to $1.50; and NZ King Salmon Investments decreased 1c or 4.76% to 20c.

Marlin Global Fund shed 3c or 3.41% to 85c, and Carbon Fund was down 8c or 4.49% to $1.70.

In the dividend-paying property sector, Goodman Trust was up 3.5c to $2.185; Stride gained 2c to $1.31; and Kiwi was down 1.5c to 89.5c.

Skellerup Holdings was up 6c to $4.80; Scales Corp rose 14c or 4.28% to $3.41; Vista Group increased 4c or 3.1% to $1.22; PGG Wrightson added 9c or 2.09% to $4.39; Ventia Services rose 10c or 3.57% to $2.90; and Eroad rose 4c or 7.69% to 56c.

Comvita increased 7c or 2.39% to $3; CDL Investments was up 2c or 2.74% to 75c; ikeGPS gained 2c or 2.6% to 79c; Bremworth added 1.5c or 4.55% to 34.5; and Steel & Tube collected 3c or 2.86% to $1.08.

Software firm Solution Dynamics, unchanged at $2.35, has received co-funding over three years from NZ Trade and Enterprise’s international growth fund to support market development in North America, and as a result, has revised its dividend payout for the period up to November 2025 to no more than 50% of net profit.

Tags: Market Close