New Zealand shares rose for a second day as the benchmark index was buoyed by The a2 Milk Co’s better-than-expected first-half result and maiden dividend.
The S&P/NZX 50 index advanced 79.75 points, or 0.6%, to 13,068.93, with a turnover off $143.1 million across the main board.
A2 Milk led the local market higher, climbing 19% to $7.86, its highest close since July, after lifting first-half profit 7.6% and raising its forecast for annual revenue growth, with swelling sales in a shrinking Chinese market. The milk marketing firm also declared its first ever dividend of 8.5 cents per share, more than the 6 cents predicted by Forsyth Barr analysts. The company was the most heavily traded stock with a volume of 3.8 million shares.
Supplier Synlait Milk joined the rally, surging 19% to 92 cents, its highest close in more than a year. Fonterra Shareholders’ Fund units increased 1.4% to $5.08, while rural services firm PGG Wrightson gained 2.9% to $2.11.
Freightways neared a three-year high as it advanced 5% to $11.53 after lifting earnings and its dividend in line with expectations, while signalling an appetite to expand its Australian footprint through mergers and acquisitions.
Gauging the economy
The courier and information management company is often seen as a barometer for the health of the economy, and the BNZ-BusinessNZ performance of services index today showed services sector activity grew in January in its first monthly expansion for 10 months.
“The PSI is consistent with stabilisation rather than elevation, but its latest move upwards is encouraging,” BNZ senior economist Doug Steel said in a note. “Some consolidation is welcome news for the services sector, after extremely challenging conditions throughout 2024.”
Spark New Zealand, which had a torrid 2024 due in part to the economic downturn, rose 2.8% to $2.98, while Fletcher Building increased 0.3% to $3.19, and NZME gained 1.9% to $1.08.
Westpac Banking Corp posted the biggest decline on the day, falling 6.4% to $36.05 after the dual-listed lender reported a 9% decline in first-quarter profit. ANZ Group Holdings slipped 2% to $34.22, while Heartland Group Holdings was unchanged at $1.08.
Contact Energy fell 2.6% to $9.15 after the electricity generator-retailer lifted first-half operating earnings 12% and raised the interim dividend 14%, in line with expectations.
Manawa Energy, which Contact hopes to buy, declined 2.3% to $5.18 after cutting its earnings guidance for the March year due to the dry January and February. Infratil, which controls the electricity generator, slipped 1.4% to $10.975.
Everyone must go
Auckland International Airport was unchanged at $8.55 after reporting a 4% increase in January passenger movements, with international visitors hitting 94% of their pre-covid levels. Air New Zealand fell 0.8% to 63.5 cents, while Tourism Holdings was unchanged at $1.87 and SkyCity Entertainment Group increased 0.7% to $1.47.
Millennium & Copthorne Hotels New Zealand rose 2.2% to $2.35, still above the $2.25 takeover offer from cornerstone shareholder City Developments Ltd, which the hotel operator’s independent directors have said is too low.
Wool carpetmaker Bremworth climbed 20% to 59 cents after the company said it’s running a strategic review of its ownership structure having attracted several expressions of interest from potential buyers.
Foley Wines was unchanged at 58 cents after appointing Mike Higgins as interim chief executive. Higgins oversees Bill Foley’s broader hospitality and lodge businesses in New Zealand.
The kiwi dollar traded at 90.12 Australian cents at 5pm in Auckland from 90 cents last week, ahead of the Reserve Bank of Australia’s policy review on Tuesday, when it’s expected to cut the target cash rate a quarter-point to 4.1%.
Meanwhile, on Wednesday New Zealand’s Reserve Bank is expected to cut the official cash rate half a percentage point to 3.75%. The kiwi dollar traded at 57.36 US cents at 5pm from 57.34 cents at 7am, up from 56.91 cents last week.
Reporting by Paul McBeth. Image from Curious News.