MARKET WRAP: NZ shares rise on cow eradication
New Zealand shares rose today, as the market had a muted response to the government’s decision to cull cow herds to eradicate the cattle disease Mycoplasma bovis.
The NZX50 index climbed 6.8 points to 8645.20, on turnover of $123 million.
Prime Minister Jacinda Ardern announced on Monday afternoon a plan of phased eradication which will cost about $886 million and cull all cattle on all infected properties.
“It’s good to see a decision being made but we’ll need to see more detail around that and communication,” says Harbour Asset Management analyst Shane Solly.
Since the disease was discovered in July last year, 11,000 cows have been slaughtered and just 4 of the 41 farms identified as infected have been cleared.
Under the plan announced today more than 150,000 cattle will be culled in a desperate bid to eradicate cattle disease.
Fonterra Co-operative shares fell 13c to $5.22 today while units in the Shareholders' Fund slipped 10c to $5.23.
A2 Milk fell 17c to $10.77, while Synlait Milk remained unchanged at $10.38.
Fisher & Paykel Healthcare's record profit of $190.2m, up 12% on last year, failed to convince investors. The company's shares fell 17c to $13.18.
Mr Solly says it was a strong result but the company’s forecast of $1.05 billion operating revenue in 2019 was “below market expectations.
“The result is reflecting some conservatism around F&P’s ongoing product launch and also some potential ongoing litigation costs.”
Steel and Tube dropped 7c to $1.48.
“We haven't seen a really sound strategy in terms of how to address its issues, so the market remains wary of the outlook there,” says Mr Solly.
On Friday, the Commerce Commission told the Auckland High Court that Steel & Tube had tested its seismic steel mesh in its staff's lunchroom oven.
Evolve Education had its chief executive Mark Finlay announce his exit today as the the company announced a $4.2 million loss for the financial year ended March 31. The result followed two previous downgrades on forecast profit.
Its shares fell 3.33% to 58c.
“Evolve is going through some change, the business has grown quite rapidly and now it’s coming back and having to readdress and re-evaluate where it goes,” says Mr Solly.
Orion Health lifted 2c, or 3%, to 69c ahead of its result tomorrow.
Fletcher Building climbed 13c to $6.68. Spark went up 8c to $3.64.
Rubicon fell 5.36% to 26c despite beating its target guidance with its annual profit. The forestry investor is targeting earnings approaching $US7m for the financial year ended March 2019.
Mainfreight, Orion Healthcare and Pacific Edge will release their full year results tomorrow and Tower will release its half year results.