The S&P/NZX 50 Index gained 68.15 points, or 0.8 per cent, to 8,398.08. Within the index, 30 stocks rose, 15 fell and five were unchanged. Turnover was $136.4 million.
Wall Street rebounded overnight following Monday’s selloff as investors found value in beaten-down stocks. Grant Williamson, director at Hamilton Hindin Greene, said the volatility seen over the past two days on Wall Street “is not really affecting NZ or Australia to any large degree”, and the local market was still quiet following the long Easter weekend.
“A lot of today’s gain is coming from a rebound in A2,” Williamson said. “The news of a bit of competition did knock back the share price somewhat, but it is improving pretty well now, especially as momentum has built up a little more today.”
Synlait was the best performer, up 4.6 per cent to $8.95, while A2 Milk rose 3.6 per cent to $12.92.
A2’s share price has been under pressure on news that competitors have begun selling their own A2-branded infant formulas in China. The stock dropped 6.5 per cent last Wednesday when Nestle confirmed it is had launched an A2 product under its Illuma brand, with the product called Atwo and sold in China, and fell a further 4.2 per cent on Thursday. Yesterday, the company said it hasn’t seen any change in growth in China and it’s confident in its business, and the shares closed up 0.6 per cent.
Overall, the stock is down 6.6 per cent from a week ago, but is up 320 per cent from this time a year earlier. Synlait, which supplies A2 and whose share price has tracked the massive gains made by A2 over the past 12 months, followed the milk marketer’s downward trend last week. It’s now down 1.6 per cent on a week ago but up 163 per cent on this time last year.
Air New Zealand gained 3.9 per cent to $3.325. The airline will end its strategic alliance with Virgin Australia Holdings in October when regulatory approval for their shared services ends.
Chief revenue officer Cam Wallace said it was the right time for each airline to pursue their own goals and the airline had built up a significant presence in the inbound visitor market from Australia, which is New Zealand’s largest. “This move will enable us to deliver a more consistent customer experience by using our own fleet and delivering an improved schedule, which we’ll provide more details about shortly,” Wallace said.
Fletcher Building was the worst performer, down 2.5 per cent to $5.78. That’s the lowest the stock has traded since July 2012, and Williamson said the stock remains under pressure after a series of poor results.
Vital Healthcare rose 0.7 per cent to $2.075. Graeme Horsley will retire as chair of the trust’s manager next month for personal reasons, while chief executive David Carr will join the board.
By: Sophie Boot