Market commentary
WELLINGTON: The a2 Milk Company pushed the S&P/NZX 50 Index into positive territory in a late trading surge on speculation the milk marketing firm might get access to the United States.
Trading of a2’s shares was halted on both sides of the Tasman after the stock lifted 8.6% to $5.42 on the NZX.
After NZX trading closed, a2 noted speculation in the Australian Financial Review that it was nearing approval from the US Food and Drug Administration but said its application to sell infant formula in the US was still being reviewed.
Like many other companies, a2 has sought to take advantage of a relaxation in US infant formula import requirements as that country grapples with a baby formula shortage.
The S&P/NZX 50 index gained 6.59 points to 11,532.46. Turnover on the main board was relatively quiet at $83.7 million.
New Zealand’s market outperformed Asia as tensions between the US and Beijing rose. Japan’s Nikkei fell 1.4% while the Hang Seng Index was down 2.5%.
According to The Guardian, the US national Security Council has insisted that Speaker Nancy Pelosi ‘‘has the right to visit Taiwan’’, amid reports that she will be landing on the island today — a move China has vowed to respond to forcefully.
‘‘We are seeing weakness in Japan and Hong Kong just as tensions between Beijing and Washington are growing as Nancy Pelosi is set to visit Taiwan,’’ Craigs Investment Partners investment adviser said Peter McIntyre said.
‘‘Anything that threatens world security is not going to be great for the market,’’ Hamilton Hindin Greene investment adviser Grant Davies said.
New Zealand faces the constant challenge of balancing its relationships with China and the US.
The market was also bolstered by gains in Plexure Group and Pacific Edge.
Plexure Group, which is outside the benchmark index, jumped 26% to 41 cents after Monday’s news McDonald’s had renewed its contract with the company to use its digital customer engagement platform for the next five years. That added to Monday’s 53% gain.
Pacific Edge clawed back some of Monday’s losses after it said its cancer tests could be dropped by a major US health insurance firm that is considering a new way to choose which tests are covered. The stock climbed 11% to 54 cents.
‘‘The company is probably going to be a bit volatile for a while,’’ Mr Davies said. ‘‘There are still a lot of unknowns around their ability to make revenue in [the United] States at the moment.’’
Heartland Group rose 1% to $2.11 and fintech Harmoney advanced 2.3% to 91 cents after news that credit rules have been rejigged to try to ensure borrowers are not unfairly penalised when applying for loans. —