Fonterra fund hits a four-month high

Investors, suppliers are taking heart from new strategy

New Zealand shares rose in quiet trading, led by Fonterra Shareholders’ Fund units which hit a fourmonth high as investors and suppliers take some confidence in the dairy processor’s new strategy.

The S&P/NZX 50 Index increased 82.80 points, or 0.8 per cent, to 10,975.62. Within the index, 36 stocks rose, nine fell, and five were unchanged. Turnover was $69.1 million, with just one stock trading on volume of more than a million shares.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said trading was very quiet, in part because investors were somewhat occupied by three capital raisings that are under way: Kathmandu, Goodman Property Trust, and Tower.

Kathmandu was the most traded stock on a volume of 1.1 million shares, more than three times its 90-day average of 283,000.

The outdoor equipment chain is in the process of raising $145m in an entitlement offer to help fund its A$350m Rip Curl acquisition. The shares were unchanged at $3.10.

“Corporate activity going on in the background is taking up a bit of time for brokers,” Davies said yesterday.

Goodman Property slipped 0.2 per cent to $2.21 and Tower fell 2.2 per cent to 67 cents.

Fonterra rose as high as $4.03, the highest since mid-June, and ended the day up 5.8 per cent at $4 on a volume of 440,000 units, about twice its 90-day average of 216,000.

The farmer-owned shares rose the same amount, up 5.8 per cent at $4.

Both securities have been on the rise since Fonterra unveiled a streamlined strategy to extract value rather than pursuing volume.

Davies said the stock had recovered some ground since Fonterra unveiled the strategy, but he also noted that good growing conditions and the prospect of higher milk production could see farmers holding more shares to meet that expectation.

rose 1 per cent to $13.19 while fell 0.4 per cent to $9.02, with just 5000 shares traded.

Restaurant Brands New Zealand was up 5.1 per cent at $11.39 on a volume of 28,000 shares. Davies said the stock was thinly traded since its partial takeover by Finaccess Capital and was prone to sharp swings.

rose 1.1 per cent to $25.14 ahead of its annual meeting where retail investor lobby, the New Zealand Shareholders’ Association plans to oppose a planned increase in directors’ fees over the lack of transparency on the decision.

rose 1.1 per cent to $4.81. The first day of court proceedings kicked off, where Fletcher and contractor Electrix are wrangling over the Christchurch Justice & Emergency Precinct.

rose 0.1 per cent to $4.565 on a volume of 702,000, well short of its 3.2 million average.

Sky Network Television posted the day’s biggest decline, down 1.8 per cent at $1.10, with 111,000 shares traded, down on its 821,000 average.

Outside the benchmark index, New Zealand Oil & Gas was unchanged at 62c ahead of next week’s special meeting. The Shareholders’ Association plans to vote against what it considers an “opportunistic” takeover offer by controlling shareholder OG Oil & Gas at 62c.