A2 Milk shares surge on better-than-expected Chinese birth numbers - Market close

Global marketer a2 Milk increased nearly 4 per cent on the back of a slowing birth rate in its crucial Chinese market as the New Zealand sharemarket finished flat for the second day running.

The S&P/NZX 50 Index traded in a range of 11,723.62 and 11,789.07 – with a stronger performance in the afternoon - and closed at 11,767.03, down 3.72 points or 0.03 per cent.

There were 52 gainers and 79 decliners over the whole market on improved volumes of 24.29 million share transactions worth $83.46 million.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said the local market reflected patchy summer trading and light volumes and was gearing up for next month’s corporate reporting season.

On Wall Street, the Dow Jones Industrial Average was down 0.62 per cent to 37,361.12 points, S&P 500 declined 0.37 per cent to 4765.98 and Nasdaq Composite decreased 0.19 per cent to 14,944.35.

The US 10 Year Treasury Note yield jumped 12 basis points to 4.071 per cent after a Federal Reserve governor Christopher Waller indicated in a speech that the central bank may ease monetary policy slower than Wall Street had anticipated.

At home, a2 Milk rose 17c or 3.96 per cent to $4.46 after China said 9.02 million babies were born last year, down from 9.56 million in 2022 – the seventh successive year that the number has fallen.

Robertshawe said the latest Chinese birth rate was a positive for a2 Milk which had previously indicated the number of births would be in the low 8 million. “The birth rate is still down but not as bad as some people thought it would be. And it appears new marriages are increasing and maybe China has hit the bottom in births.”

The Chinese market makes up about 70 per cent of a2 Milk’s infant formula sales and revenue.

Ryman Healthcare reached a 12-week high after gaining 5c to $6; but among other retirement village stocks Summerset Group was down 11c to $10.79 and Oceania Healthcare fell 3c or 4.05 per cent to 71c.

Meridian Energy, up 4.5c to $5.61, said in its latest operating report that national hydro storage for the four weeks ending January 12 decreased from 88 per cent to 84 per cent of historical average and retail sales volume in December increased 10.3 per cent compared with the previous corresponding month.

At the end of the second quarter, Meridian’s customer numbers were 1.3 per higher and retail sales volumes increased 3.8 per cent at a 5.2 per cent higher average price.

Of other energy stocks, Mercury increased 13c or 2.01 per cent to $6.60; Manawa gained 4c to $4.35; and Genesis was down 3.5c to $2.485.

Amongst the small caps; Steel & Tube improved 3c or 2.59 per cent to $1.19; Eroad gained 2c or 2.22 per cent to 92c; Solution Dynamics increased 5c or 3.33 per cent to $1.55; and Cooks Coffee was up 1.3c or 8.13 per cent to 17.3 per cent.

Fisher and Paykel Healthcare, which has an 11.6 per cent weighting on the NZX top 50, was down 27c to $23.29; Ebos Group declined 31c to $35.41, The Warehouse decreased 3c or 1.88 per cent to $1.57; Comvita fell 10c or 4.02 per cent to $2.39; and Scales Corp was down 10c or 2.99 per cent to $3.24.

Of the property companies, Goodman Trust was down 4c or 1.77 per cent to $2.22, and Precinct also declined 4c or 3.10 per cent to $1.25.

NZ King Salmon Investments continued its solid run, gaining 1c or 3.64 per cent to 28.5c. NZ King was at 19c in early November and has just gained Fisheries New Zealand backing for its open ocean farm in the Cook Strait.

Channel Infrastructure, declining 2c to $1.43, told the market that fuel shipments reached 900 million litres in the three months ending December, up 62 million litres on the previous quarter and 13 per cent higher than the fourth quarter in 2022. The increased throughput continues to be driven by strong demand for jet fuel.

Radius Care, down 0.001c to 14.1, has completed the $18.3m sale of the Arran Court rest home in Auckland. The money was used to reduce debt and Radius said ASB has agreed to extend the expiry date of the remaining $4.7m short-term borrowings from January 31 this year to November 1, 2026.