Few gifts to share as market ends on flat note

The New Zealand sharemarket closed for Christmas on a flat note with Synlait Milk and Move Logistics providing gloomy trading updates. The S& P/ NZX 50 Index finished at 11,634.43, up 6.44 points or 0.06 per cent in the half- day trading session. As expected, turnover was light, with 12.25 million shares worth $ 33.99 million changing hands, and there were 75 gainers and 47 decliners on the main board.

Shane Solly, portfolio manager with Harbour Asset Management, said Father Christmas didn’t quite deliver the presents, despite a solid recovery in the United States.

“We had an ugly downgrade from Synlait and Move Logistics was facing headwinds in its sector. We’ve had a few downgrades lately and this reflects lower consumer activity and spending in a slowing economy, which is all music to the Reserve Bank. It takes away the bank’s need to be hawkish and poses the question of when do we see rate cuts.”

The US Dow Jones Industrial Average was up 0.87 per cent to 37,404.35 points; S& P 500 increased 1.03 per cent to 4746.75; and Nasdaq Composite rose 1.26 per cent to 14,963.87.

At home, Synlait Milk fell 6c or 6.06 per cent to a new low of 93c after telling the market the sale of Christchurch- based Dairyworks cannot be assured even though discussions with potential buyers are continuing. Synlait is talking with the banking syndicate about a plan to reduce its debt and repay at least $ 130m by March 28 next year. The dairy company is in arbitration with a2 Milk, up 2c to $ 4.60, following a2 Milk’s move to cancel the exclusive arrangement with Synlait for manufacturing and supplying infant formula in China.

Move Logistics declined 3c or 5.17 per cent to 55c after revising its firsthalf operating earnings ( Ebitda) to $ 11.5m-$ 12.5m because of lower customer demand. Move said economic and sector headwinds continue to impact customer volumes, costs and growth opportunities.

The energy sector underpinned the market, with Mercury rising 10c to $ 6.47; Meridian gaining 7c to $ 5.48; and Manawa up 5c to $ 4.21.

Napier Port increased 14c or 5.83 per cent to $ 2.54, Scales Corp rose 20c or 6.47 per cent to $ 3.29. Delegat Group rebounded 20c or 3.33 per cent to $ 6.20; Arvida Group increased 3c or 2.97 per cent to $ 1.04; PGG Wrightson was up 6c or 1.82 per cent to $ 3.36; Allied Farmers added 3c or 3.95 per cent to 79c; and 2 Cheap Cars gained 2c or 2.35 per cent to 87c. Utility pole measurement provider ikeGPS rose 5c or 10.64 per cent to 52c after telling the market it has signed a new $ 3.7m contract with a US company.

Freightways was down 13c to $ 8.25; Heartland Group declined 4c or 2.76 per cent to $ 1.41; Green Cross Health shed 3c or 2.63 per cent to $ 1.11; KMD Brands decreased 2c or 2.78 per cent to 70c; and Tourism Holdings was down 5c to $ 3.80.