The A2 Milk Co beat earnings expectations, grabbing record market share in China.
A2 Milk chief executive David Bortolussi.
New Zealand’s S&P/NZX 50 index was one of the laggards across Asia, with Meridian Energy, Genesis Energy and Mercury NZ all declining as investors cleared their portfolios to take part in Contact Energy’s $525 million capital raising.
Contact was among companies reporting, with A2 Milk Co rallying after beating earnings expectations as it continued to gain market share in China, while Freightways advanced as it eked out a fatter margin and delivered an increased dividend.
Interest rate sensitive companies such as Ryman Healthcare, Argosy Property and Goodman Property Trust declined ahead of the Reserve Bank’s policy review on Wednesday, which economists predict will indicate rates will start rising later this year.
And retailers including KMD Brands and Briscoe Group were broadly weaker after Statistics New Zealand figures showed an unexpectedly large decline in consumer spending on credit and debit cards in January, with the rough weather muddying the waters.
The NZX50 fell 80.27 points, or 0.6%, to 13,117.91, with 33 stocks declining, 13 gaining, and four unchanged. Turnover across the main board was $112.7 million, of which Fisher & Paykel Healthcare accounted for $20.7m as it dipped 1 cent to $36.60.
The electricity generator-retailers were a major weight on the index, with Meridian Energy down 3.1% at $5.58, Genesis Energy falling 1.6% to $2.43 and Mercury NZ down 1.4% at $6.24 as institutional investors made room to participate in Contact Energy’s $450m placement, with another $75m coming from a retail offering.
Trading of Contact’s shares was halted to run the bookbuild for the placement, selling at $8.75 a share, an 8.8% discount to Friday’s closing price. The power company’s board also declared a 16 cents per share dividend, unchanged from a year earlier, after lifting first-half earnings 24%.
Infratil, Contact’s biggest shareholder, fell 2.5% to $10.94.
“Contact decided to be the first cab off the rank – they’re in a trading halt until tomorrow, but obviously their share price will come off,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
Companies sensitive to interest rate movements were broadly weaker, with commercial landlords all on the red side of the ledger, as Argosy Property declined 2.9% to $1.115, Goodman Property Trust fell 2.9% to $1.86, Vital Healthcare Property Trust slipped 2.8% to $1.94 and Precinct Properties NZ decreased 2.5% to $1.13 on the biggest volume of the day, with 3.2 million shares changing hands.
Sullivan said wholesale interest rate markets have fully priced in a rate hike by the end of October, with the Reserve Bank’s review on Wednesday to be closely watched for a firmer view on the timing.
Ryman Healthcare fell 5.4% to $2.47, with Real Estate Institute of New Zealand figures showing a soft start to the year for the housing market, with prices and sales falling and the days to sell getting longer. Fletcher Building declined 2.5% to $3.54.
Retailers were also softer after Stats NZ figures showed consumer spending on credit and debit cards fell 1.1% in January, with declines across all sectors.
Kim Mundy, a senior economist at ASB Bank, said the recovery in household consumption remains patchy and won’t offer much relief to businesses waiting for the turnaround.
“We continue to expect further recovery in both consumer spending and the housing market in 2026,” Mundy said in a note. “However, with the effective mortgage rate at or near its trough, it looks like it will increasingly be up to the labour market and a recovery in net immigration to do the heavy lifting.”
KMD Brands dropped 3.9% to 24.5 cents, while Briscoe Group fell 2.2% to $4.50 and Hallenstein Glasson Holdings slipped 0.5% to $9.90. Outside the benchmark index, Warehouse Group slipped 1.3% to 75 cents and Michael Hill International rose 1% to 48.5 cents.
Vista Group International posted the biggest decline on the NZX50, falling 8.9% to $1.64, near a two-year low.
The A2 Milk Co was a standout on the day, climbing 5% to $10.50 after beating analysts’ expectations as first-half revenue climbed 19% and it claimed a record market share in China’s infant formula of 8.2%.
Tourism Holdings rose 1.7% to $2.35 after selling its UK and Irish business for $58.3m.
Among other companies to gain, Sky Network Television rose 2.9% to $3.20 and Serko gained 2.3% to $2.25.
NZX was unchanged at $1.41 after West Coast mining prospector Rua Gold lodged its listing notice to join the local exchange in a foreign exempt listing on Feb 23. Rua graduated to Toronto’s main stock exchange last week.
Outside the benchmark, Santana Minerals halted trading of its shares – last at $1.115 – to raise fresh capital, which the Australian Financial Review’s Street Talk column reported was A$120 million at 90 Australian cents apiece, an 8.6% discount to the 98.5 Australian cents price on the ASX.
The kiwi dollar was unchanged at 60.32 cents at 5pm in Auckland from last Friday.
US stock markets are closed on Monday for the Presidents Day public holiday, while Chinese markets are closed for the Lunar New Year holiday.
Reporting by Paul McBeth.
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