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MARKET CLOSE: NZ shares rise as A2 buoyed by Bubs result

Tuesday 30th July 2019

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(July 29, 6:00 PM) New Zealand shares rose as A2 Milk and Synlait Milk were buoyed by a strong June quarter for infant formula maker Bubs Australia. Ebos Group led the market higher on a light volume. 

The S&P/NZX 50 Index increased 43.75 points, or 0.4 percent, to 10,851.36. Within the index, 27 stocks rose, 20 fell and three were unchanged. Turnover was $82.1 million with just four companies trading on volumes of more than a million shares. 

A2 Milk hit a record $17.85, and ended the day up 2.7 percent at $17.70 on a volume of 581, less than its 90-day average of 706,000. Dairy companies on both sides of the Tasman got a boost from Bubs' June quarter update, which showed the formula maker more than doubled revenue to A$18.5 million. ASX-listed Bubs shares were up 5.6 percent at A$1.42 in afternoon trading. 

"The key things for A2 are broker upgrades - we've seen some of those - and confirmation of strong earnings growth, and we've had that as well," said Peter McIntyre, an investment adviser at Craigs Investment Partners. 

Synlait Milk, which supplies A2 and often moves in lock-step with the milk marketing firm, advanced 1.1 percent to $9.91. Both Fonterra Shareholders' Fund units and the farmer-owned Fonterra Cooperative Group shares fell 0.5 percent to $3.77. 

Ebos led the market higher, up 3.2 percent at $24.26 with just 43,000 shares changing hands, less than half its 114,000 average. 

Exporters were among the day's better performers, benefitting from a dip in the New Zealand dollar to a 19-day low against the greenback. Vista International Group rose 2.5 percent to $6.20, Fisher & Paykel Healthcare increased 0.9 percent to $16.48, and Sanford was up 0.6 percent at $6.70. 

Air New Zealand rose 0.7 percent to $2.76 after its latest operating figures showed a 1.6 percent increase in unit passenger revenue per available seat kilometre - known as RASK - in June from a year earlier. 

"Their RASK numbers were reasonable and the share price has reflected that," McIntyre said. He also pointed to the increased Bali capacity from next year as indicating more demand on that route. 

Vital Healthcare Property Trust was the most traded stock on a volume of 2.5 million units, more than 10 times its 221,000 average. It rose 1 percent to $2.64.

Chorus rose 1.5 percent to $5.48 on a volume of 1.8 million shares, about four times its 447,000 average, while Spark New Zealand increased 0.3 percent to $3.90 on a volume of 1.3 million, less than half its 3.2 million average. 

Fletcher Building rose 2 percent to $5.10 with 1.1 million shares changing hands. 

Heartland Group Holdings posted the day's biggest decline, down 2.4 percent at $1.63 on a volume of 352,000 shares, in line with its 319,000 average. Pushpay Holdings fell 2.4 percent to $3.33 and Mercury NZ was down 2.3 percent at $4.69. 

Outside the benchmark index, NZ Windfarms decreased 0.7 percent to 14.1 cents after it signed a 15-month hedge on all the production from its Te Rere Hau wind farm near Palmerston North without disclosing the price or who the counter-party was.

Seeka fell 1 percent to $5.15 after saying it is considering a sale and leaseback arrangement for some or all of its Australian orchards. 

Abano Healthcare was unchanged at $4.42 ahead of reporting its annual earnings tomorrow. The dental clinic operator this month said earnings before interest, tax, depreciation and amortisation were in line with $33 million guidance provided in March. 

Of companies holding annual meetings tomorrow, Asset Plus was unchanged at 64.5 cents, Green Cross Health fell 0.9 percent to $1.15, and Mainfreight declined 0.6 percent to $41.66. 

Chorus's 2021 bonds paying annual interest of 4.12 percent were the most traded debt security with an unusually large volume of 4.1 million. The notes closed at a yield of 2.41 percent, down 8 basis points. Heartland Bank's 2022 bonds paying 4.5 percent were also heavily traded on a volume of 1.4 million. The notes closed at 2.55 percent, down 9 basis points. 

(BusinessDesk)

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