Shares drop on Fonterra, a2 weakness
New Zealand shares dropped after Fonterra Co-operative Group cut its dividend forecast, weighing on the Fonterra Shareholders’ Fund and a2 Milk Co. Steel & Tube Holdings plunged to a 17-year low after warning of a full-year loss.
The S&P/NZX 50 Index fell 60.09 points, or 0.7 per cent, to 8553.23. Within the index, 20 stocks fell, 19 rose and 11 were unchanged. Turnover was $171 million.
Fonterra Shareholders’ Fund
units led the index lower, dropping 6.8 per cent to $5.35. The co-operative has raised its forecast farmgate milk price for the 2018 and 2019 seasons while cutting its projected dividends for 2018, saying rising global dairy prices are squeezing margins. It raised its forecast milk price for the current season by 20 cents to $6.75 per kilogram of milk solids and gave an opening price forecast for 2019 of $7/kgMS, but cut its forecast dividend range for the current year to a range of 15-20 cents a share, from a previous forecast of 25-35 cents.
“People were aware that there was a high chance the dividend would be reduced. It’s the magnitude that has frightened people,” said Rickey Ward, NZ equity manager at JBWere New Zealand.
“It’s very easy for many potential investors to find a reason not to invest, normally that comes around the governance structure and the thought that they favour farmers over investors.”
dropped 4.4 per cent to $10.24. The stock has fallen 22 per cent since last week, when it reported a 70 per cent increase in revenue for the nine months to March 31.
Argosy Property and Sky Television are best performers
Auckland International Airport Comvita
fell 2.4 per cent to $6.59 and dropped 2.3 per cent to $5.93. was the best performer, up 2.5 per cent to $1.045. rose 1.7 gained ad-
Argosy Property
Sky Network Television Metlifecare Chorus
per cent to $2.39,
1.7 per cent to $6, and vanced 1.6 per cent to $4.12.
Outside the benchmark index, Steel & Tube plunged 18.2 per cent to $1.62, the lowest it has closed since May 2001.
dropped 8.7 per cent to $2.74. The online travel booking software developer reported a maiden annual profit ahead of an expansion into the Northern Hemisphere and a planned ASX listing next month.
Serko