Cream still rising for dairy pair
Synlait and A2 lead record high
New Zealand shares hit a record, led higher by A2 Milk and Synlait Milk continuing to gain, though the market was mixed with blue-chips like Auckland Airport falling.
The S&P/NZX 50 Index rose 25 points, or 0.3 per cent, to a record 7974.7. Within the index, 24 stocks fell, 14 rose and 12 were unchanged. Turnover was $145 million.
Synlait Milk was the best performer, rising 7 per cent to $6.90, while A2 gained 5.7 per cent to $7.26, meaning both stocks hit fresh records yesterday. The two stocks have gained since last Thursday — Synlait up 17 per cent, and A2 up 11 per cent — on confirmation that their brands have gained registration in China, removing an obstacle in a market with soaring sales, before both giving up gains on Wednesday. They have had strong years so far, rising 207 per cent and 110 per cent respectively.
“A2 is the stock that won’t stop, it will be our largest listed company soon — it’s got a market cap over $5 billion, which is pretty impressive for a company which was only worth a few million a few years ago,” said Grant Williamson, investment advisor at Hamilton Hindin Greene. “It has made up a good chunk of the index’s overall rise this year, it could be as much as a third, so that success has probably distorted the overall rise in the index. There are few signs of it slowing down at the moment, but when something has gone up as fast as A2 has, profit taking takes over at some stage, and it will be in for a pretty big correction when that happens.”
Auckland Airport was the worst performer, down 2.6 per cent to $6.27. Shareholder Peter Wakemen is seeking support for three proposals to safeguard the company from future fuel supply disruption, to cut carbon emissions and to lobby the government to use so-called “debt-free money” to fund climate initiatives.
The board of directors said it does not support the proposals ahead of its annual general meeting on October 26 but is unanimously in favour of the re-election of two board members, the election of a new nominee and a slight increase in directors’ remuneration.
Meridian Energy fell 1.7 per cent to $2.82 and Mercury NZ dropped 1.6 per cent to $3.355.
Outside the benchmark index, ERoad rose 18.1 per cent to $2.68 after the company continued to gain traction in the US in the latest quarter ahead of the December deadline for logistics firms to use electronic logging devices. —