Wednesday 18th September 2019
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(Sept. 17, 5:45 PM) New Zealand shares snapped a six-day decline as export-focused firms such as Scales Corp and Fisher & Paykel Healthcare benefited from a weaker currency. Synlait Milk extended its gain amid merger and acquisition activity in Australia's dairy sector.
The S&P/NZX 50 Index advanced 36.28 points, or 0.3 percent, to 10,868.03. Within the index, 27 stocks rose, 16 fell, and seven were unchanged. Turnover was $225.7 million of which F&P Healthcare accounted for $91.9 million.
Stocks across Asia were mixed as investors digested gyrations in oil prices after attacks on Saudi Arabian processing facilities over the weekend. Australia's S&P/ASX 200 Index was up 0.1 percent in afternoon trading, Hong Kong's Hang Seng fell 1 percent and Singapore's Straits Times Index was down 0.5 percent.
The heightened nervousness about geopolitics and upcoming Federal Reserve policy has been weighing on the kiwi dollar, which ended the local session at 63.31 US cents. The currency has dropped about 5.7 percent so far this year, benefitting exporters by increasing the value of their earnings in foreign markets.
F&P Healthcare rose 2 percent to $17 on a volume of 5.4 million shares, more than 10 times its 90-day average of 509,000. Of that, almost 4.8 million changed hands in one trade at $17 a share. The breathing mask respirator maker generates more than half its revenue in US dollars and has already raised its earnings guidance on the weaker currency outlook.
"It's one of the most sensitive to the US dollar cross rate - with the kiwi just above 63, they're in a pretty reasonable position," said Mark Lister, head of private wealth research at Craigs Investment Partners.
Among other exporters to gain, apple grower Scales led the market higher, up 3.7 percent at $5 on a volume of 103,000 shares, in line with its usual volume of 97,000.
Mainfreight rose 2.9 percent to $39.62, recovering some of yesterday's sell-off when transport and logistics stocks were knocked around by the spike in oil prices.
"Any time there's weakness in that stock, even a little bit, there's a flurry of buying," Lister said.
Synlait Milk rose 1.9 percent to $9.50, extending yesterday's 3.6 percent gain. The milk processor was buoyed by a A$1.5 billion takeover bid for ASX-listed Bellamy's Australia, which revived optimism about Chinese appetite for infant formula makers.
A2 Milk posted the day's biggest decline, down 1.7 percent at $14.26 on a volume of 1.3 million shares, giving up some of yesterday's gain. The milk marketing firm, which counts Synlait as a supplier, is briefing investors in China about its business.
Z Energy extended its decline, down 1.5 percent at $5.34, its lowest close since November. The stock has dropped about 19 percent over the past week after downgrading earnings guidance on heightened competition in the market.
Contact Energy decreased 0.6 percent to $8.35 on a volume of 1.3 million shares after announcing Refining NZ boss Mike Fuge will take over as chief executive next year. Refining NZ was down 0.5 percent at $2.10.
Mercury NZ rose 2.4 percent to $5.17 on a volume of 2.9 million shares, more than four times its 623,000 average. Spark New Zealand increased 0.3 percent to $4.475 on a volume of 2.8 million shares and Fletcher Building was up 0.2 percent at $5.15 on a volume of 2.7 million.
Of other stocks trading on volumes of more than a million shares, Kiwi Property Group was unchanged at $1.65, and Vista Group International decreased 0.3 percent to $3.91.
Fonterra Shareholders' Fund units increased 0.9 percent to $3.21 after Fonterra said it will report its annual earnings on Sept. 26. It delayed the initial release to give it and its auditor more time to finalise the accounts.
Sky Network Television was unchanged at $1.14 after announcing veteran media executive and company director Joan Withers joined the board, effective immediately.
Kathmandu Holdings rose 1.5 percent to $2.79 ahead of reporting its annual earnings tomorrow. It upgraded its guidance last month.
Fellow retailer Briscoe Group, which owns a 19 percent stake in Kathmandu, fell 0.8 percent to $3.69 after reporting a 3.6 percent decline in first-half profit and saying the outlook for the rest of the year remained uncertain.
Rubicon climbed 7.2 percent to 19.4 cents after the forestry firm held its first annual meeting under new leadership. It will rebrand as ArborGen at the end of the month.
After the close of trading, dual-listed Mercantile Investment said it would de-list from the NZX following the compulsory takeover by Sandon Capital. The shares last traded at 17.5 cents.
NZX increased 0.8 percent to $1.26. Booster's Private Land and Property Fund will list on the exchange tomorrow.
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