New Zealand shares gained, led higher by Ryman Healthcare and A2 Milk Co on some positioning ahead of upcoming earnings, while Infratil and Fonterra Shareholders Fund dropped.
The S&P/NZX50 Index gained 45.4 points, or 0.5 percent, to 8,335.36. Within the index, 24 stocks rose, 21 fell and five were unchanged. Turnover was $86.6 million.
Rickey Ward, NZ equity manager at JBWere, said that while the market is currently quiet, investors are positioning themselves ahead of the earnings season to come in February, when roughly two-thirds of the benchmark index will report either first half or annual earnings.
"We're either going to get confirmation that the market is stretched for value, or we're going to get justification for it to keep going higher," Ward said. "Analysts have earnings per share growth of around 6 percent, a large portion of that is recovery for a number of stocks - mainly SkyCity and A2. If you don't get either of those occurring, it's going to be a flat year. You need a lot of good things to happen to justify a continuation of the thematic. A2's going to lead the charge on whether we get EPS growth again."
A2 Milk Co rallied 3.5 percent to $8.83 today.
"It keeps going, it has regained more than its losses from December and steadily gone higher," Ward said. "They had good news last week on going into further stores in the US, there's a general feeling that they're going to announce a positive set of numbers in the next update."
SkyCity Entertainment Group dropped 1 percent to $3.95.
Fonterra Shareholders Fund fell 0.8 percent to $6.47. Fonterra Cooperative Group today criticised struggling infant formula producer and distributor Beingmate Baby & Child Food, which it uses to sell its Anmum formula in China, after the Chinese company cut its forecast earnings overnight.
Beingmate, of which Fonterra owns 18.8 percent, said its loss in calendar 2017 was between 800 million Chinese yuan and 1 billion yuan, or $171 million to $214 million, compared to a previous forecast loss of between 350 million yuan and 500 million yuan.
"They have come under a bit of pressure regarding that particular investment, particularly in light of how successful A2 has been in that market through a different distribution channel," Ward said. "From one side, you're pleased that they're going to take a more active role by the sounds of things, but you're also disappointed that yet again a large amount of money has been invested by Fonterra into an entity that doesn't seem to be delivering."
Ryman Healthcare led the index higher, up 3.9 percent to $10.80, with Spark New Zealand rising 1.7 percent to $3.62.
Infratil was the worst performer, dropping 2.1 percent to $3.26. NZX fell 1.8 percent to $1.12.
Outside the benchmark index, Augusta Capital was flat at $1.06 It has made a conditional offer to buy a property owned by one of its syndicates that it wants for an industrial property fund slated to be launched this year.
Blis Technologies was unchanged at 1.9 cents. The Dunedin-based company reported a positive third quarter result but said that, combined with an ongoing recovery in the fourth quarter, won't offset a tough first half and it lowered full-year guidance. The company now expects revenue "in excess of $5 million" and an ebitda loss below $500,000, it said.
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