MARKET CLOSE: NZ shares up, Metro Glass bounces while A2, Synlait fall from records
By Sophie Boot
Oct. 3 (BusinessDesk) - New Zealand shares rose slightly as post-election limbo continued, with Metro Glass rebounding from recent selling while A2 Milk Co and Synlait gave up some gains.
The S&P/NZX 50 Index gained 4.53 points, or 0.06 percent, to 7,933.42. Within the index, 26 stocks rose, 20 fell and four were unchanged. Turnover was $155 million.
James Smalley, senior advisor at Hamilton Hindin Greene, said investors weren't too rattled by the wait for the final results of the general election as there is a clear end point - on Saturday, when the official vote tally is released - and have been willing to sit on their hands in the interim.
"The market has been marching to our own beat to a certain extent, we're in a political limbo at the moment until we find out what happens with the special votes and then obviously the real horse trading begins," Smalley said. "In recent years foreign ownership has increased markedly and perhaps those investors are a lot more sensitive to political change, plus they are exposed to movements in the currency. It's not unexpected to see things kind of treading water until we get some certainty, but it means we are missing out on the positive sentiment seen overseas."
Metro Performance Glass gained 2 percent to $1. The shares hit a record low of 98 cents yesterday, and have fallen more than 50 percent over the past year, with two sharp drops in February and August this year as outlook worsened.
While Milford Asset Management this week sold down its stake in the stock to 6.8 percent from 7.8 percent, the New Zealand Superannuation Fund has increased its holding to 7.3 percent from 6.2 percent, documents released by the NZX show.
"There has been quite a bit of institutional movement over the last couple of weeks, from an overseas fund and Milford, so there has been a large amount of selling in a short space of time which is going to affect your price," Smalley said. "On their guidance they look to be quite cheaply priced, but I don't think the market has a lot of confidence given the number of downgrades they've issued. They're going to have to earn back the market's confidence."
Arvida Group rose 2.5 percent to $1.24, Summerset Group gained 2 percent to $5.18, and Scales Corp advanced 1.9 percent to $3.77.
A2 Milk Co gave up some gains, down 2 percent to $6.54, while Synlait Milk was the worst performer, down 3 percent to $6.55. The two stocks have jumped since last Thursday on confirmation that their brands and recipes have gained registration in China, removing an obstacle in a market with soaring sales. They have had strong years so far, up 213 percent and 117 percent respectively.
"A2 does tend to move the market quite a bit, it was responsible for about one-third of the market's gains last week," Smalley said. "There have been no real significant moves on either side today, you've just got the real outperformers coming back a little."