MARKET WRAP: Synlait, A2 rise, Xero soars on ASX
New Zealand shares rose today on Synlait and A2 Milk gains, while the market awaits the end of Fletchers’ trading halt tomorrow.
The NZX50 index rose 3.54 points to 8373.03, on turnover of $107 million.
“Synlait continues to gain a lot of support and it’s probably getting pretty fully priced but it’s certainly getting a strong run,” says Craigs Investment Partners senior investment adviser Nigel Scott.
Synlait Milk went up 30c to $9.88, while A2 rose 35c to $12.70.
Mr Scott says with A2 milk bouncing between $12 and $14 recently, it looked certain the company would enter the MSCI index.
The company announced earlier this week it’s re-entering Korea through a sales and distribution agreement with pharmaceutical company Yuhan.
Fletcher Building remains in a trading halt until Friday after it announced a $750m fresh equity raise on Tuesday.
The company today dismissed concerns over its 50/50 joint venture building the Puhoi to Warkworth highway, saying it reported a nil margin on Tuesday because of a policy not to book any profits on projects until they're at least 20% complete.
Mr Scott says he understands Fletchers’ offer of a one-for-4.46 rights issue priced at $4.80, a 23.4% discount from Monday's closing price of $6.27, is going down well with shareholders.
“People are looking at going forward, looking at their projections. Yes, there’s a lot of water still to go under the bridge, but this is the start of the refurb-recap position of Fletchers.”
Xero, which delisted from the NZX in November, was up $AU1.26 to $AU37.26 today on the ASX.
“Looking cross-country, it’s up about $10 since it left New Zealand, so certainly a very strong move there,” says Mr Scott.
Spark, which had a streak of share price hikes this week following its confirmation it won the rights to the 2019 Rugby World Cup, fell 3c to $3.40.
Kathmandu was down 2c to $2.52. The outdoor clothing company closed its share purchase plan after it oversubscribed by $2m yesterday.
Metlifecare dropped 13c to $5.70, while Sky TV fell 2c to $2.30.