NZ stockmarket hits a record high
New Zealand shares inched higher to a fresh record in mixed trading, with Air New Zealand and Fisher & Paykel leading gains while Fonterra Shareholders Fund dipped on concerns the co-operative is overpaying for milk.
The S&P/NZX50 index rose .87 points, or 0.01 per cent, to 8978.18. Within the index, 26 stocks fell, 12 rose and 12 were unchanged. Turnover was $182.8 million.
“The US gave up half a per cent late and Asian markets were, broadly speaking, down a bit, with the exception of the almighty New Zealand market which continues to be driven by a very narrow grouping of largecap growth companies, in particular Fisher & Paykel Healthcare yet again leading the way,” said Matt Goodson, managing director at Salt Funds Management.
Fisher & Paykel rose 1.8 per cent to $15.01, a record high. The stock has gained 14 per cent since its earnings announcement in May, when it said it lifted 2018 annual profit to the top end of its forecast range and said it expects record earnings in the coming year as it benefits from growing global demand.
Air New Zealand led the index higher, up 2.4 per cent to $3.20. The airline told investors at a briefing it still expects annual earnings to beat last year’s result despite the squeeze from rising fuel costs, which it sees as an ongoing headwind into 2019.
“It’s rebounding strongly from recent weakness following its strategy day — it’s highlighting a few levers it has to deal with rising fuel prices such as price increases, being more cautious about future capacity growth and a reasonable hedging programme it has in place,” Goodson said.
Mercury New Zealand rose 1.5 per cent to $3.43. Tourism Holdings gained 1.1 per cent to $6.74 and Port of Tauranga rose 1 per cent to $5.17. Synlait Milk was the worst performer, dropping 2.2 per cent to $10.55, with units in Fonterra Shareholders Fund down 1.8 per cent to $5.01. The Commerce Commission said yesterday it is concerned that the “asset beta” Fonterra Co-operative Group uses to determine the farmgate milk price is too low, meaning it ends up paying its farmers a higher price for their milk than would be warranted under the company’s enabling law.
Trustpower dropped 1.6 per cent to $5.73, Fletcher Building fell 1.3 per cent to $6.75, and Ebos Group declined 0.9 per cent to $18.73.
Outside the benchmark index, Scales Corp rose 0.4 per cent to $4.66. The company held its annual meeting in Christchurch on Wednesday. It has agreed to sell its cold storage businesses Polarcold Stores and Whakatu Coldstores, which were merged on January 1 under the Polarcold brand, to Emergent Cold for $151.4m, subject to Overseas Investment Office approval.