Milk firms keep stocks frothy
Synlait the best performer while Comvita and Vector decline
New Zealand shares rose, led by Synlait Milk and a2 Milk Co, with Sky Network Television rebounding from Monday’s selling.
The S&P/NZX 50 Index gained 75.71 points, or 0.9 per cent, to 8508.12. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $145.8 million.
“The market is bouncing back after being sold off a bit further [on Monday],” said Grant Davies, investment adviser at Hamilton Hindin Greene.
“[Yesterday] was a risk-on day, the market got sold off . . . on reasonably low volumes and it has been bid back up on better volumes. A2 and Synlait have done well on that, they’re high growth stocks which require plenty of international trade happening.”
Synlait Milk was the best performer, up 6.9 per cent to $9.10, while A2 Milk Co gained 3.3 per cent to $13.84.
Sky Network Television rose 6.6 per cent to $2.42.
On Monday, long-standing chief executive John Fellet announced he plans to retire within the next year.
Separately, Sky released an investor briefing showing it was moving to provide more on-demand services as it works to retain its sports rights and stabilise core earnings.
“That presentation . . . was a little bit more positive, a bit more forward- looking than some people gave them credit for,” Davies said.
“There were some worries there might be a loss of negotiating skills with John Fellet gone, but he will still be on the board so that’s not lost.”
Contact Energy rose 2.5 per cent to $5.29, Meridian Energy gained 1.7 per cent to $2.98, and Fisher & Paykel Healthcare advanced 1.7 per cent to $13.30.
Comvita was the worst performer, down 3.3 per cent to $7.25, while Vector dropped 3.3 per cent to $3.23.
SkyCity fell 1.3 per cent to $3.85. It is looking to free up cash from its existing assets during a period of heavy investment while it commits to protecting dividend payouts.
To raise cash, the company said it has appointed investment bank Goldman Sachs to test interest from “selected parties” in its Darwin casino as it continues to evaluate strategic options for the business, including a full sale.
Any funds from a sale would be used to repay debt in the short term, and fund strategic and growth initiatives, it said.
“They have traded sideways for quite a while now,” Davies said.
“The market was probably hoping they would be able to bundle this through cash flows rather than asset sales, and from an investment perspective hoping they will look to divest some of the underperforming Australian assets.” — BusinessDesk