MARKET CLOSE: NZ shares dip, Metro Glass at low while A2, Sanford, Synlait gain
By Sophie Boot
Oct. 2 (BusinessDesk) - New Zealand shares fell slightly with Metro Performance Glass hitting a record low while A2 Milk Co and Synlait Milk extended last week's gains.
The S&P/NZX50 Index dipped 1.5 points, or 0.02 percent, to 7,928.89. Within the index, 22 stocks fell, 15 rose and 13 were unchanged. Turnover was $139 million.
"Last week the New Zealand market had its best week since the middle of June - we're probably just cooling off slightly," said Mark Lister, head of private wealth research at Craigs Investment Partners. "People are waiting around to see how the political scene develops: that's probably not a story for this week. There's not a lot of corporate news about, no real results to speak of this week."
Metro Glass led the index lower, down 2 percent to 98 cents, a record low. The shares have dropped over the past twelve months, having traded at $2.22 last October, with two sharp drops in February and August this year as outlook worsened.
"It has been one of the worst performers of the last few months. It has more than halved in value in the last year, it's looking pretty ugly if you're an investor," Lister said. "You'd think they would have been able to capture some of that construction industry strength over the last couple of years, but they haven't, and people are of the view that they've sort of missed the boat with the economic backdrop."
A2 Milk Co was the best performer on the index, up 3.7 percent to $6.67, while Synlait Milk gained 1.8 percent to $6.75. The two have gained strongly this year as sales and market access to China have improved, with A2 up 202 percent and Synlait gaining 113 percent so far.
"Certainly there are a few people thinking maybe A2 and Synlait have run a little too hard in the short term given the strength we've seen, which has been nothing short of phenomenal," Lister said. "Whether they can sustain those gains is another story - people will be watching with interest to see if you get any profit taking or weakness emerge, but for the time being it seems to be full steam ahead."
Lister said agricultural stocks were in vogue, especially those with exposure to China. Sanford gained 2.6 percent to $7.90 while Comvita finished unchanged at $7.50, though traded higher throughout the day.
Outside the benchmark index, Veritas Investments jumped 25 percent to 8 cents after it announced it had its debt deadline partially extended by its bank to allow continuing discussion of possible deals. In August, ANZ Bank New Zealand said it wouldn't renew $28.5 million in banking facilities which come due in October and November this year. Today, Veritas said the debt due to mature today has been extended until Nov. 30, meaning the majority of its debt now matures on Nov. 30.