Shares rise amid heavy day’s trading
New Zealand shares rose in heavy trading as several stocks entered MSCI indices, with new entrant Synlait Milk leading gains alongside Mercury NZ. A2 Milk Co fell.
The S&P/NZX 50 index advanced 10.93 points, or 0.1 per cent, to 8658.79. Within the index, 26 stocks rose, 18 fell and six were unchanged. Turnover was $1.26 billion.
Market watchers and market operator NZX had anticipated this might be the biggest ever day of trading for the market, which hit a record $1.6b in trading one day in 2017.
The changes announced earlier this month in the semi-annual review of the MSCI Equity Indexes were implemented yesterday. That saw a2 Milk included in the MSCI Global Standard Index, exiting the MSCI Global Small Cap Index, and Mercury leaving the standard index to join the small cap, an index which Restaurant Brands New Zealand, Synlait and Tourism Holdings also joined.
A2 Milk, which was bought up following the announcement on May 15, has been sold off lately after an earnings update disappointed investors. The stock ended the day down 0.1 per cent to $10.87, having traded as high as $11.13 and as low as $10.80 throughout the day.
“Considerable index passive-type funds usually buy at the closing prices. They don’t want to take any intra-day risk,” said Craig Stent, executive director and head of equities at Harbour Asset Management. “There are people that buy for index reasons, but there are also hedge funds and people that arbitrage this so they get ahead of it and they do the opposite of what the index fund is doing. So there’s lots of noise but when it comes to the crunch at the end of the day, not much tends to happen in terms of the share price in these bigger companies.”
Synlait was the best performer, up 5.1 per cent to $11.25, with Mer
cury gaining 2.4 per cent to $3.23.
Tourism Holdings fell 2.1 per cent to $6.53. Restaurant Brands dipped 1.1 per cent to $7.78. Along with joining the small-cap index, the fast-food operator announced it had lifted firstquarter sales 12 per cent to $180m after it acquired a further 13 KFC stores in Australia.
Trustpower was the worst performer on the index, down 4.4 per cent to $5.65, after shedding rights to a 17c per share dividend. Air New
Zealand fell 3.5 per cent to $3.13, Sky Network Television dropped 3.3 per cent to $2.32 and Meridian Energy declined 2.1 per cent to $2.985. Outside the benchmark index,
ikeGPS dropped 15.3 per cent to 50c. The laser measurement tool maker narrowed its annual loss after lifting sales 37 per cent and cutting a fifth from its wage bill. It’s optimistic positive cash flow generated in the fourth quarter will persist, meaning it won’t need to raise more capital.