NZ sharemarket has mixed trading day, Synlait tumbles further

Debt-ridden Synlait fell a further 9% and, this time, dragged its major customer, a2 Milk, down as the New Zealand sharemarket had another day of mixed trading.

Thursday, April 4th 2024, 6:32PM

by BusinessDesk

The S&P/NZX 50 Index was up and down all day and traded within a range of 12,038.91 and 11,996.29 before closing at 12,035.26, down 5.23 points or 0.04%.

There were 71 gainers and 63 decliners over the whole market on volumes of 29.02 million share transactions worth $109.12m.

Wall Street was also mixed following Federal Reserve chair Jerome Powell’s wait-and-see speech at the Stanford Graduate School of Business.

Powell said the Fed has time to assess incoming economic data before starting interest rate cuts, which will likely come at some point this year. He said the strength of the economy gives the Fed flexibility.

Powell said that the recent inflation readings, which came in higher than expected, did not materially change the overall picture of cooling prices.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said Powell’s speech didn't give much guidance.

“The US is still likely to cut before us and once the Fed does, then it paves the way for other central banks to do the same.”

Sullivan said next week, the Reserve Bank of NZ’s monetary policy statement will be closely followed.

Local market

Synlait was down 6c or 8.82% to 62c and has fallen more than 18% since announcing its $96.2m first-half net loss on Tuesday. a2 Milk, which has a 20% shareholding in Synlait, declined 24c or 3.64% to $6.36.

Sullivan said a2 Milk’s share price drifted on concern that some dairy farmers might walk away from supplying Synlait. But these farmers need to give notice, normally for up to two years, and by that time, Synlait should have its balance sheet sorted.

He said a2 was down on light volume and “I don’t see any panic. People are just translating Synlait’s supply issues with a2 Milk.”

Global marketer a2 Milk did last year cancel the exclusive manufacturing arrangement with Synlait for most of its infant formula supply.

Ryman Healthcare decreased 7c to $4.48; PGG Wrightson shed 5c or 2.27% to $2.15; Vector was down 8c or 2.04% to $3.85; and Carbon Fund fell 7c or 4.14% to $1.62.

In the retail sector, Briscoe was up 9c or 1.96% to $4.68; The Warehouse gained 3c or 1.97% to $1.55; and Hallenstein Glasson was down 18c or 2.8% to $6.26.

Other decliners were Serko falling 11c or 2.91% to $3.67; Move Logistics down 1.5c or 3% to 48.5c; Steel & Tube decreasing 2c or 1.87% to $1.05; and Radius Care shedding 1c or 7.14% to 13c.

Mercury Energy rose 12c or 1.79% to $6.84; Heartland Group increased 3c or 2.52% to $1.22; Comvita rebounded a further 9c or 4.19% to $2.24; Arvida Group added 3c or 2.68% to $1.15; and Oceania Healthcare gained 3c or 4.92% to 64c.

Other gainers were Scott Technology, increasing 9c or 3.15% to $2.95; Eroad, up 4c or 4.6% to 91c; Millennium & Copthorne Hotels NZ, rising 9c or 4.86% to $1.94; Accordant Group, improving 2c or 3.45 % to 60c; and 2 Cheap Cars adding 2c or 2.5% to 82c.

Being AI

New listing Being AI attracted a price enquiry from market regulator NZ RegCo after rising a further 2c or 40% to 7c on 34 trades worth $59,500.

Artificial intelligence stock Being AI has risen from 1.7c since its first trade on Tuesday and the company confirmed it is meeting continuing disclosure obligations.

Sullivan said Being’s price is being pushed around on light volume – having AI in its name seems to be the rationale – and it’s one of those stocks that doesn’t get institutional interest because of the size of the business.

He cautioned investors who haven’t researched the fundamentals of the Being business.

Kiwi Property, up 1.5c or 1.79% to 85.5c, told the market that the value of its $3.2 billion portfolio has increased 0.1% or $3.6m for the six months ending March, despite the slow economy and high-interest rate environment. Fellow property stock Argosy gained 2c or 1.74% to $1.17.

Rua Bioscience, down 0.003c or 4.05% to 7.1c, has signed an agreement with Malta-based AlphaFarma, which will supply Rua dried flower medicinal cannabis products for the German market through its distribution partner Nimbus Health.

Tags: Market Close