MARKET CLOSE Fonterra holds up as NZX50 cracks 4,200
Jan 28 (BusinessDesk) - New Zealand shares rose again today, cracking through the 4,200 mark on the NZX50 Index of leading stocks, as Fonterra fought a global media blitz to allay concerns about the safety of New Zealand milk.
The NZX50 closed up 4.616 points, or 0.11 percent, at 4,2204.437. Within the index, 25 stocks rose, 14 fell, and 11 were unchanged. Turnover was very light on a day when markets in Auckland and Australia were shut for public holidays, at $43.830 million.
Leading the market up was transport and logistics firm Freightways, which put on 2.06 percent to close at $4.45, followed by a 1.85 percent uptick in Skellerup Holdings shares to close at $1.65.
However, all eyes were on Fonterra Shareholders Fund unit prices on the first trading day since global media began paying attention to the discovery of minute traces of a chemical used to reduce greenhouse gas emissions from cattle, in milk powder.
Fonterra units fell from $4.23 over the day to close at $7.13, and often appeared well-supported at around $7.14. Total FSF volume was 601,770.
Fonterra chief executive Theo Spierings enlisted help from Prime Minister John Key to get the message out to key export markets for New Zealand's $14.5 billion dairy export trade that the chemical was at concentrations 100 times below European requirements and constituted no public health or safety risk.
Andrew Bascand, at Harbour Asset Management said Fonterra appeared to be front-footing the issue successfully with international investors.
"Commentary from our Chinese agents says they are comfortable with where we are at," he said. "The thing to watch for is for a country to want to be cautious. We don't want to be put in an 'on the bench' situation" where a product was even temporarily withdrawn from sale.
"Even if that did happen, it's an opportunity to invest," Bascand said.