MARKET CLOSE: NZX 50 inches lower as Freightways, Ryman drop; A2 back in favour

Friday 15th June 2018

New Zealand shares hit a fresh record in busy trading, led by Synlait Milk and A2 Milk Co while investors took profits on Freightways and Ryman Healthcare.

The S&P/NZX 50 Index rose 30.4 points, or 0.3 percent, to 9,008.58. Within the index, 22 stocks rose, 18 fell and 10 were unchanged. Turnover was $283.4 million

"The market keeps ticking up, driven a little bit again by Australia, particularly with A2, which was down at the open but has been up since the ASX started trading," said Grant Williamson, a director at Hamilton Hindin Greene.

A2 Milk was the most heavily traded stock on the index, with $52.8 million in turnover, and rose 3.5 percent to $11.90. A2's share price has been turbulent over the past month since it gave an update with a less positive outlook than many investors had expected, dropping from $13.30 before the announcement to as low as $10.24 in late May, though it has been recovering lost ground since then.

Synlait Milk was the best performer, up 3.5 percent to $10.92, while Air New Zealand rose 3.4 percent to $3.31 and Scales Corp gained 2.6 percent to $4.78. Summerset Group Holdings advanced 1.7 percent to $7.61 and Westpac Banking Corp was up 1.6 percent to $29.86.

"There might be a bit of profit-taking in some stocks today - Freightways and Ryman Healthcare, both those stocks have had fantastic rallies in recent times," Williamson said. "Ebos is another that has come off a wee bit as well. Overall, it is another solid day."

Freightways was the worst performer, down 4 percent to $7.96, and Ryman fell 1.2 percent to $11.86. Ebos Group dropped 1.1 percent to $18.17.

Mercury New Zealand fell 2.6 percent to $3.34, Gentrack Group declined 1.8 percent to $7.27, and Heartland Bank was down 1.7 percent to $1.74.

Outside the benchmark index, PGG Wrightson dropped 4.3 percent to 67 cents. It reaffirmed its forecast for annual earnings between $65 million to $70 million, saying weaker performance from its Australian and South American businesses would be offset by better trading in New Zealand. That's up from $64.5 million last year and in line with its February forecast.

In February, the company said 2018 net profit would be about 20 percent lower than last year's $46.3 million, due to one-time gains from property sales in 2017. Today, chief executive Ian Glasson said net profit after tax from normal trading was forecast to be about 25 percent lower, reflecting the lack of significant property sales which added $8.7 million to earnings last year, an expected loss on currency hedges, and costs associated with potential Holidays Act remediation.

(BusinessDesk)

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