Market close: Blue chips help NZ sharemarket to gain

Dairy nutrition company a2 Milk, once the second biggest listed company, has spent much of the year dragging the New Zealand sharemarket down. Now it is doing its darndest to pull the market up.

Boosted by news that its main China daigou sales channel has improved, a2 Milk climbed another 32c or 4.64 per cent to $7.23 and has risen 17 per cent in two days. It has added nearly $1 billion to its market capitalisation, now sitting at $5.36b.

The a2 Milk price reached an intraday high of $7.67 on trade worth $26 million, and helped push the S&P/NZX 50 Index ahead 23.3 points or 0.18 per cent to 13,048.49.

There were 79 gainers and 54 decliners on volume of 38.15 million share transactions worth $122.03m.

The a2 Milk rebound is timely. The MSCI World Index is entering its twice-yearly rebalancing period – the price of its 1561 constituents is measured on a random day during the last 10 trading days of this month.

Matt Goodson, managing director of Salt Funds Management, said a2 Milk is on a knife-edge in terms of staying in the global index as the pricing begins.

“It’s a big deal. There’s a good chance a2 Milk will stay in, and this will provoke a flurry of buying as tens of million dollars is involved in short selling the stock,” he said.

The other Kiwi companies in the MSCI index are Fisher and Paykel Healthcare, Auckland International Airport, Spark, Ryman Healthcare, Meridian and Mercury.

Goodson said the latest China producer-price index showed a 10.7 per cent increase for the year to September on the back of rising coal and energy prices – the highest rate since records started in 1996.

“Our September quarter consumer price index, out next week, could also be a high number – more than 4 per cent – and it will show inflation is returning with a vengeance and is here to stay.

“It means cyclical stocks, with top-line pricing power, will come to the fore as the high-growth and pure yield shares don’t have the same inflation protection,” Goodson said.

He said there was plenty of initial public offering activity in Australia, and one of them Vulcan Steel will have a secondary listing here. “It will be interesting to see what the spillover is.”

Market leader Fisher and Paykel Healthcare was up 19c to $30.26; Ebos Group rose 35c to $34.25; Freightways gained 15c to $12.80; Pushpay Holdings collected 4c or 2.21 per cent to $1.85; and Sanford increased 9c or 1.82 per cent to $5.04.

Auckland International Airport was up 13.5c to $7.77. The airline reported total passenger volumes increased 68.4 per cent in August but dropped 92.2 per cent in September compared with the same months last year.

Chorus, up 6c to $6.40, increased its fibre connections by 23,000 to 894,000 during the first quarter of the 2022 financial year, and the fibre uptake across the completed ultra-fast broadband network is now 66 per cent.

Online personal lender Harmoney Corp surged 18c or 10.11 per cent to $1.96 after reporting record new loan originations for the September quarter, including growing 885 per cent to A$31m ($32.79m) in Australia compared with the previous corresponding period. Its loan book reached $517m.

Mainfreight was down $1.33 to $89.32; Restaurant Brands declined 22c to $15.48; and South Port New Zealand fell 18c or 1.93 per cent to $9.16. Infrastructure and communication services firm Vital was down 4c or 5.71 per cent to 66c.

Energy stocks Mercury fell 15c or 2.37 per cent to $6.205; Meridian was down 11c or 2.2 per cent to $4.90; and Contact declined 8c to $8.21.

Vital Healthcare Property Trust was down 7c or 2.33 per cent to $2.94 after completing the $115m placement at $2.90 a unit. The $25m unit purchase plan opens on October 19.

Other gainers were Vista Group, rising 5c or 1.96 per cent to $2.60; SkyCity Entertainment, also up 5c to $3.18; EROAD gaining 8c to $5.48; and Gentrack increasing 4c or 2.27 per cent to $1.80.

Third Age Health Services rose 16c or 6.27 per cent to $2.71 after completing the purchase of the Auckland Belmont Medical Centre for $170,000.

New Zealand Oil & Gas maintained a steady run, rising 3c or 6.12 per cent to 52c after sitting at 43c on September 29. NZOG reported the sixth Mahato well in Indonesia has been drilled and is producing 800 barrels of oil a day. NZOG’s subsidiary Cue Energy Resources has a 12.5 per cent interest in the Mahato oil field.

NZOG is also a partner, along with operator Beach Energy and Genesis, in the now-completed $72m inlet compression project at the Kupe gas production station near New Plymouth. The project takes the plant back to full production, and Genesis’ share price gained 3c to $3.32.

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