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MARKET CLOSE: NZ shares gain as A2 calms critics with strong sales

Wednesday 17th October 2018

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New Zealand shares rose, led by A2 Milk Co, which calmed nervous investors with a strong first-quarter update. Synlait Milk followed suit, albeit on much lighter volumes. 

The S&P/NZX 50 index climbed 108.34 points, or 1.2 percent, to 8,911.79. Within the index, 37 stocks gained, seven fell and six were unchanged. Turnover was $106.8 million. 

A2 jumped 9.2 percent to $10.59 on average volumes, having touched an eight-month low last week. The milk marketer today said it increased its Chinese market share for infant formula to 5.6 percent in the September quarter from 5.1 percent just three months earlier, and affirmed its outlook for revenue growth. Synlait, which supplies A2, rose 7.7 percent to $9.85 on less than half its normal volume.

"Across a number of measures it looked pretty sound and good," said James Lindsay, a senior portfolio manager at Nikko Asset Management. A2 and Synlait have high index weightings and contributed most of today's gain in the NZX 50, he said. 

However, gains were widespread with stock markets across Asia following Wall Street higher. 

Mercury NZ increased 0.8 percent to $3.34 on heavier trading than usual. The electricity generator-retailer operational update for the September quarter showed strong hydro generation from a record period a year earlier. Retail customers slipped to 386,000. Contact Energy rose 2 percent to $5.73 and Auckland International Airport increased 1.5 percent to $7. 

Genesis Energy rose 0.6 percent to $2.46 in quiet trading after announcing a partnership with Tilt Renewables to develop a wind farm in Taranaki. Tilt, which is under a takeover offer from Infratil, was unchanged at $2.31. 

Z Energy fell 2.5 percent to $6.62 on a volume of 2.9 million shares, the busiest stock today. The transport fuels firm reported lower retail petrol sales in the September quarter. 

Port of Tauranga declined 1.8 percent to $4.94 in busier than normal trading. It forecast profit to rise by as much as 8.1 percent in the June 2019 year on increased cargo volumes. 

Among other active stocks, Sky Network Television was unchanged at $2.20 on volumes of 1.9 million shares ahead of tomorrow's annual meeting. Spark New Zealand increased 0.3 percent to $3.90; Meridian Energy slipped 0.6 percent to $3.11 on a volume of 1.2 million shares. 

Outside the benchmark index, Steel & Tube fell 2 percent to $1.46 after New Zealand Steel bought a blocking stake in the company, paying $1.75 a share. Fletcher Building had sought to buy its smaller rival but was rebuffed twice and walked away. NZ Steel's parent, BlueScope Steel said it has no plans for a takeover. 

AWF Madison fell 6.9 percent to $1.76 after saying the collapse of three construction firms dented first-half earnings. 

Pacific Edge extended its recent run, up 12 percent to 43.5 cents on more than six times the normal volume. The stock's at a 12-month high. NZAX-listed TruScreen rose 2.1 percent to 24 cents. Both cancer test makers have reported sales successes in the past week. 


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