Market close: AustralianSuper ups its stake in SkyCity

SkyCity shares were up 2 cents or 1 per cent to $1.95 on the day that AustralianSuper increased its stake from 7.27 per cent to 8.38 per cent of the gaming company’s issued capital. Photo / Peter Meecham

New Zealand’s benchmark share index rose – just – on the first day of the school holidays as investors chewed over last week’s global monetary decisions while closer-to-home Synlait Milk reported a net loss in its full-year results.

The S&P/NZX 50 Index rose 4.5 points, or 0.04 per cent, to 11,377.12. Turnover was a light $68.9 million and there were 69 gainers and 69 decliners on the main board.

Craigs Investment Partners advisor Peter McIntyre said the New Zealand market had a sluggish start to the day, but recovered ground as trading got closer to the end of the day.

There was a flurry of monetary decisions from across the globe last week, including the US Federal Reserve leaving interest rates unchanged as expected, The Bank of Japan left policy settings untouched and the Bank of England surprised markets with a pause. Throw in the looming election where it looks increasingly likely a National/Act government will come out as the victor, and there’s a lot for investors to chomp on.

“We’ve had higher interest rates, higher bond yields, uncertain markets, plus an election chucked in as well,” McIntyre told BusinessDesk.

“So there’s been a lot in the pot for investors to digest and some are just probably sitting on the sidelines taking a big breath waiting for confirmation as to what the result will be in answer.”

On the company news front, Synlait Milk disclosed a challenging fiscal year on Monday, posting a $4.3 million net loss for the 12 months ending on July 31, in contrast to the previous year’s $38.5m net profit.

This aligned with their projected range of between a $5m net loss to a net profit of $5m.

The year was marked by multiple difficulties, including reduced customer demand, CO2 shortages, extreme weather, the covid-19 pandemic, inflationary pressures, and ongoing investments in new product development.

Revenue declined by 3 per cent to $1.6 billion, while earnings before interest, taxes, depreciation, and amortisation (ebitda) plummeted by 31 per cent to $90.7m.

Synlait’s shares were up 1 cent or 0.8 per cent to $1.28 by the end of the day. Synlait Milk shares experienced a decline of more than 6 per cent last Monday following news that a2 Milk said it intended to terminate its exclusive supply agreement with the company.

A2 Milk claimed Synlait’s performance in 2023 did not meet the required standards for exclusivity in producing stages 1 to 3 of a2 Milk’s infant milk formula in China, Australia, and New Zealand.

A2 Milk’s shares were down 2 cents or 0.4 per cent to $4.64. Fonterra Shareholders’ Fund Units were up 4 cents or 1.1 per cent to $3.59.

The dispute resolution process entails a 20-business day negotiation period, followed by arbitration if needed, with both parties aiming to resolve the matter by the end of 2024. In other company news, AustralianSuper – Australia’s largest superannuation fund – has expanded its investment in Auckland-based SkyCity Entertainment amid a drop in the company’s share price due to regulatory concerns.

The New Zealand Department of Internal Affairs’ threat to suspend SkyCity’s casinos caused the share price to plummet by over 16 per cent, closing last week at $1.93. AustralianSuper’s stake has increased from 7.27 per cent to 8.38 per cent of the gaming company’s issued capital.

SkyCity was up 2 cents or 1 per cent to $1.95 by early evening. KMD Brands rose 3 cents or 3.6 per cent to 86 cents, still riding the news of its full-year results that came out last week.

The Warehouse Group, which reports its full-year earnings on Thursday, was up 1 cent or 0.6 per cent to $1.73.

McIntyre said some of the index’s bigger stocks had helped pull the market up slightly from its downward retreat on Monday. Among them was Auckland International Airport, up 5 cents or 0.7 per cent to $7.80. Contact Energy which rose 4 cents or 0.5 per cent to $8.20, Fletcher Building up 4 cents or 0.9 per cent to $4.66 and Fisher & Paykel Healthcare up 20 cents or 0.9 per cent to $22.08.

On the other side of the coin, a few stocks dragged the market lower. Among them were Ryman Healthcare falling 9 cents or 1.4 per cent to $6.45, Westpac down by 30 cents or 1.3 per cent to $22.69, Genesis Energy down 4 cents or 1.7 per cent to $2.39 and Tourism Holdings down 5 cents or 1.4 per cent to $3.65.

Merchant services company Smartpay Holdings was down 8 cents or 4.8 per cent to $1.60. Computer software firm Serko rose 10 cents or 2.4 per cent to $4.25. AFT Pharmaceuticals was down 5 cents or 1.5 per cent to $3.35 on light trading. PBL Solutions is appealing part of a recent High Court judgment that favoured them in their dispute with AFT Pharmaceuticals over the “orphan” drug Pascomer.

The NZ dollar was trading at 59.61 US cents at 3pm in Wellington, up from 59.27 on Friday. The trade-weighted index was at 70.43, from 70.11 on Friday.