by BusinessDesk
The S&P/NZX 50 Index opened stronger and reached a late morning high of 12,172.63 but turned down and closed at 12,128.21, up 14.67 points or 0.12%.
Volumes were lighter with 28.93 million shares worth $98.1m changing hands.
'Good for market sentiment'
Mark Lister, investment director with Craigs Investment Partners, said, “We had a difficult time last week when all other markets rebounded. The local market had been down five weeks in a row – the longest weekly losing streak since late 2023.
“Investors are a bit cautious and the market today was lacklustre. The December quarter gross domestic product was better than expected, but it came off a low base, and there’s still the feeling that the economy is yet to pick up,” Lister said.
“People are waiting for April 2 to see the extent of the US tariffs – whether they will be targeted or across the board. It will be good for market sentiment and New Zealand if the tariffs are targeted.”
ASB expects growth over the remainder of the year to be more gradual.
“The domestic spending recovery hasn’t materially picked up yet. That will come progressively as home borrowers gradually roll onto lower mortgage rates.
"We still expect two further 25 basis-point cuts in the official cash rate in April and May,” ASB said.
Fonterra Shareholders” Fund hit an intraday high of $6.04 before closing with a gain of 10c or 1.72% to $5.90. It was last at that level in March 2018.
Lister said for some time, Fonterra was a terrible performer, with the fund’s share price as low as $2.80 in early 2022.
“Farmers had been disappointed in Fonterra for years, but finally, they have good news – milk price payments at an all-time high and strong dividend – and the major resurgence is down to the current management team,” he said.
Milking it
Synlait Milk confirmed its return to profitability, albeit small, but was down 11c or 10.98% to 90c. Synlait reported revenue of $916.76m, up 16%, and net profit of $4.8m for the six months ending Jan 31, turning around a loss of $96.22m in the previous corresponding period.
Synlait reduced its net debt by 29% and is targeting a debt balance of $250m to $300m for the full year, positioning the company well for its bank refinancing process in the second half.
Revenue was led by higher demand for advanced nutrition products and improved ingredients stream returns.
However, Synlait told the market that financial progress in the second half will be slower as it balances several opportunities and risks related to milk stream returns and foreign exchange and delivers ongoing operational and cost improvements.
Synlait said the majority of its South Island farmers were not under cease-to-supply notices; in fact, the dairy company expects to take on new farmer suppliers.
The forecast average milk payment to suppliers without a cease notice for the 2024/215 season is $10.48 per kg/MS, including premium payments.
Lister said the improved result at the top end of the January guidance was underpinned by new customer wins and a better deal out of a2 Milk.
“The share price fall was a case of the heat coming out of it, having doubled this year. The result was better than feared, but the stock has had a solid run.”
Other stocks
Auckland International Airport was up 11c to $7.90; Meridian Energy gained 12c or 2.26% to $5.44; Ebos Group added 30c to $37.50; Contact collected 8c to $8.60; Sky TV increased 6c or 2.5c to $2.46; and Mainfreight was up 79c to $65.25.
The Warehouse rebounded 2c or 2.38% to 86c; Restaurant Brands gained 10c or 2.94% to $3.50; CDL Investments collected 2c or 2.6% to 79c; and New Talisman Gold Mines climbed a further 0.005c or 8.62% to 6.3c.
Briscoe Group was 12c or 2.75% to $4.25; a2 Milk decreased 14c to $8.80; Freightways eased 17c to $10.70; Manawa Energy declined 17c or 3.47% to $4.73; Sanford shed 16c or 3.22% to $4.81; and Skellerup was down 11c or 2.24% to $4.81.
Spark and Ryman Healthcare were again down, 2c to $1.98 and 6c or 2.25% to $2.61, respectively.
Vista Group declined 11c or 2.82% to $3.79; Oceania Healthcare decreased 3c or 4.69% to 61c; Precinct Properties shed 3c or 2.62% to $1.15; and Scott Technology eased 4c or 2.14% to $1.83.
KMD Brands, down 1.5c or 4% to 36c, announced Ashley Reade, vice president and general manager of Nike Pacific, as the new chief executive of Rip Curl and will report to group CEO Brent Scrimshaw.
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