Market commentaries

WELLINGTON: New Zealand shares dipped from a record high yesterday, Air New Zealand and Mercury New Zealand falling while Synlait Milk and Fletcher Building made gains.

The S&P/NZX50 Index fell 4.45 points, or 0.05%, to 8708.78. Within the index, 21 stocks fell, 20 rose and nine were unchanged. Turnover was $206 million.

The driving force behind many movements on the exchange yesterday was a review of global stock indices by MSCI. a2 Milk Co started the day higher after MSCI included it in its main global index, but closed down 1.5% to $13.10.

Mercury New Zealand dropped 1.4% to $3.11 on news it will leave the main MSCI index. Separately, Infratil, the investment company that owns 50.8% of Tilt Renewables, said it would not approve Mercury increasing its new 19.99% holding in Tilt, having made its own offer for the stock.

Mercury said on Monday it had agreed to buy the stake in Tilt, the wind and solar generation company split from Infratilcontrolled Trustpower in 2016, from the Tauranga Electricity Consumer Trust (Tect) for $144 million, a 24% premium. Mercury said it had a sixmonth option to buy the trust’s remaining 6.8% holding in Tilt at the same price, but under New Zealand’s Takeovers Code any move above 20% would likely require it to make an offer for the whole company.

‘‘It looks interesting for Mercury from here, obviously Infratil are very happy with their ownership in Tilt and don’t necessarily want other holders to go beyond that threshold,’’ Peter McIntyre, investment adviser at Craigs Investment Partners, said.

‘‘There was an expectation they were going to play a long game on this, but it may fizzle out at the 19.9% holding.’’

Air New Zealand led the index lower yesterday, down 2.2% to $3.31, while Chorus dropped 2.2% to $4.015 and Fisher & Paykel Healthcare Corp fell 1.8% to $12.88.

Fletcher Building, which was tipped possibly to exit the main MSCI index, will remain, and gained 3% to $6.56.

‘‘Some people had expected it to go out, but we’ve also had Fisher Funds make an announcement today that they’re buying in, which has given the stock an upward tick today,’’ Mr McIntyre said.

‘‘A number had probably shorted the stock and they’re buying back in today.’’

Synlait Milk, which will enter the MSCI smallcap index at the end of the month, was the best performer yesterday, up 5.5% to $10.75.

‘‘If we go back to April, when Synlait announced they were going to double their lactoferrin capacity, they’ve been on an upwards price trajectory since then,’’ Mr McIntyre said.

‘‘Synlait has got a good story — they’re spending capital on growing their business and they’ve captured investors’ imaginations.’’

Other stocks to join the smallcap index also gained, Tourism Holdings up 3.8% to $6.35 and Restaurant Brands rising 1.1% to $7.70.

A The Australian sharemarket has lost ground amid widespread losses yesterday, including sharp falls in the telco sector following Telstra’s earnings warning.

The benchmark S&P/ASX200 index was down 37.5 points, or 0.61%, at 6097.8 points while the broader All Ordinaries index was down 36.3 points, or 0.58%, at 6198.7 points.

All sectors of the market were weaker, with the exception of IT stocks, and the telco sector was the worst performer, tumbling 5.1%. — BusinessDesk /AAP