MARKET WRAP: NZ shares rise despite global dairy prices slipping

New Zealand shares were in the green today as the market kept one eye on positive Australian GDP numbers and the other on a slip in dairy prices at the latest Global Dairy Trade auction.

The S&P NZX50 index rose 56 points to 8813, on turnover of $168 million.

Fat Prophets head of research Greg Smith says Global Dairy Trade prices are “up and down like a yoyo”, but that didn’t have too much of an impact on New Zealand’s wonder stock - A2 Milk.

A2 shares fell just 0.91% to $10.90 while global dairy prices slipped 1.3% to $US3487 a tonne from April 17 in the latest overnight Global Dairy Trade auction.

Benchmark whole milk powder, which made up more than half the volume sold, fell 1.1% to $US3205/t. Demand for skim milk powder continued with a rise of 0.3% to $US2051/t.

A2’s supplier Synlait Milk might have felt the weight of the drop in prices, as its shares were down 2.15% to $10.90.

New Zealand King Salmon has just been through its worst ever summer but says it still expects to reach the top end or higher of its profit guidance of $24.5m to $26m for the 12 months to June 30 2018. 

The company says it’s possible that next year will be more profitable, even though it’s forecasting that harvest will match this year's. 

Investors like the sound of that, New Zealand King Salmon shares gained 0.9% to $2.25.

Mr Smith says there has been good productivity from the companies eight farms despite the impact of a hot summer which took its toll on fish numbers.

“It is looking to future proof things and move some of the fish to deeper and cooler waters which should mitigate stock losses.”

Fisher & Paykel Healthcare produced its highest profit ever last week, and forecasts it to grow again this year as demand increases. New Zealand's biggest listed healthcare company saw net profit after tax rise 12% to $190.2m in the year to March 31, at the top end of its forecast $180-190m.

Today Fisher & Paykel Healthcare shares rose 3.52% to $14.40.

“I’ve heard other analysts say that the shares are priced to perfection, but clearly investors aren’t listening and they’re lapping up that record result,” Mr Smith says.

Kathmandu shares fell 1.65% to $2.38. Mr Smith says despite today’s drop the company has been a “resilient performer” considering the headwinds in the retail sector.

New low for Steel & Tube
Steel & Tube hit an 18-year low today after its shares fell 3.5% to $1.38.

“Investors continue to head for the exits after the shock profit warning last month. But the hallmarks are there for a turnaround, I suppose things can’t get much worse.”

Mr Smith says there is a lot of major restructuring to be done at the company.

Sky TV shares were bolstered slightly after it announced the launch of a low-cost, mobile-only version of Fanpass - its no-contract service that offers streaming versions of Sky Sports. Its shares closed the day up 0.42% to $2.39.

Metro Performance Glass shares gained 1.12% to 90c. The glass manufacturer had been struggling to cope in recent years with the rapid growth from a strong construction market, with labour constraints.

It has disappointed the market since its private equity owner Crescent Capital listed it on the NZX at $1.70 in 2014. In the past couple of years, its shares have seen a high of $2.23 and a low of 72c.

ANZ shares dipped 0.14% to $28.91 after the bank was charged with criminal cartel offences following an investigation by Australian watchdog the ACCC.