Sharechat Logo

MARKET CLOSE: NZ shares rally, led by A2, F&P Healthcare, Sky TV, Synlait rise; Cavalier jumps

Tuesday 5th June 2018

Text too small?

New Zealand shares rose after the three-day weekend, led by A2 Milk, Fisher & Paykel Healthcare and Sky Network Television. Cavalier jumped after giving guidance for improved full-year earnings.

The S&P/NZX 50 Index rose 120.88 points, or 1.4 percent, to 8,757.04. Within the index, 41 stocks rose, seven fell and two were unchanged. Turnover was $159 million.

A2 rose 5.3 percent to $11. The milk marketer has fallen from a peak of $14.62 in late February on concern about increased rivalry in the Chinese market and on disappointment margins haven't grown as fast as sales.

"It's a company that's had pretty good growth but has disappointed in the rate of growth and so the shares have come slowly back. Today is a recovery day," said Rickey Ward, NZ equity manager at JBWere. He said A2 may also have benefited from Fonterra Cooperative Group's comment today that strong demand out of China continues with imports across all key categories up for the 12 months to March.

Synlait Milk rose 1.6 percent to $11.14 while the Fonterra Shareholders' Fund fell 0.2 percent to $5.20.

Investore Property gained 5.4 percent to $1.57, leading the index higher.

Meridian Energy rose 2.9 percent to $3.15 after saying it is considering offering up to $200 million of seven-year unsecured, unsubordinated fixed rate bonds to institutional and New Zealand retail investors. 

JBWere's Ward said other listed corporates may also look to tap the bond market "to take advantage of an investment community with a lot of cash and looking for places to invest" as a result of corporate activity such as the $438 million takeover of NZX-listed Tegel Group by Philippines-based poultry group Bounty Fresh Foods and recent bond maturities.

Corporates may also want to raise debt capital to benefit from current low interest rates, given the signs are that interest rates will rise from here, Ward said.

F&P Healthcare rose 3.2 percent to $13.91 and Sky TV rose 2.6 percent to $2.38.

Kathmandu Holdings was the worst performer, down 1.6 percent to $2.42, while Kiwi Property Group fell 1.4 percent to $1.37.

Outside the benchmark index, Cavalier jumped 13 percent to 62 after the carpet maker forecast annual profit of $3.7 million to $4 million, from a year-earlier loss, driven by improved margins following the carpetmaker's restructuring and the benefits of more favourable wool prices.

"It was an upgrade in very low numbers," Ward said. "But it has gone from a loss to a profit company so that's not a bad thing."


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares gain as Trade Me hits record on takeover
NZ dollar higher against USD as jitters about China-US trade tensions recede
Rakon boosts bank funding to meet increased telco demand
Underfunded Overseer farm management tool needs thorough review: Upton
Motor vehicle lending helps UDC lift annual profit 6%
Orr says RBNZ still under-resourced, funding model part of second phase of review
Leading business brokerage firm LINK raises a further NZ$3.45m in capital
Travel insurance and the AirNZ strike
Industrial heat a challenge for cost-effective emissions reduction
Hallenstein Glasson wary of margin squeeze in second half

IRG See IRG research reports