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19 Mar 2018 6:17
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  •   Home > News > Rural

    Shares gain as investors take a2 above $9b

    New Zealand shares rose on Thursday, led higher by another strong day for a2 Milk Co after signing a supply deal with Fonterra.

    Air New Zealand
    Air New Zealand

    New Zealand shares rose on Thursday, led higher by another strong day for a2 Milk Co after signing a supply deal with Fonterra.

    Air New Zealand gained on a higher interim dividend and Tourism Holdings fell despite beating earnings expectations.

    The S/NZX 50 index increased 66.61 points, or 0.8 per cent, to 8266.88. Within the index, 17 stocks gained, 29 fell, and four were unchanged. Turnover was $229 million.

    A2 Milk led the benchmark index higher, rising 9.8 per cent to $12.90 as investors continued to rally behind the milk marketing firm after stitching up a supply arrangement with Fonterra and reporting stronger first-half earnings than anticipated.

    The company's market capitalisation rose above $10 billion during the day, placing a bigger value on it than Fonterra's $9.77 billion, although at the end of trading a2 was worth $9.42 billion.

    "At one stage we (the NZX 50) were nearer to 2 per cent - it shows how much of a swing it's been," said James Lindsay, a portfolio manager at Nikko Asset Management.

    "Year-to-date the business (a2) has been a major contributor helping alleviate the rest of the market."

    Fonterra units rose 1.2 per cent to $6.10, while a2's existing supplier Synlait Milk gained 1.5 per cent to $6.75, recovering some of Wednesday's selloff over the new arrangement.

    Air NZ rose 1.2 per cent to $3 after the national carrier lifted its interim dividend, despite posting a 7.4 per cent decline in first-half earnings over rising fuel costs.

    Fletcher Building gained 1.7 per cent to $6.50, recovering from a five-year low. SkyCity Entertainment Group, which is facing off with Fletcher over the escalating cost of building the Auckland international convention centre, fell 4 per cent to $3.87, the biggest decline on the benchmark index.

    Tourism Holdings fell 2 per cent to $5.92, despite doubling first-half profit on its North American expansion and lower US tax bill.

    Among companies reporting Friday, Port of Tauranga fell 0.4 per cent to $4.99, Comvita was unchanged at $8.38, Steel Tube fell 1.4 per cent to $2.06, Delegat Group gained 1.5 per cent to $7.62, and Summerset Group slipped 0.2 per cent to $5.81.


    © 2018 NZN, NZCity

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