NZ sharemarket gets boost from economic data - Market close

A2 Milk CEO David Bortolussi. The renewed confidence in the dairy sector helped push a2 Milk up 20c or 3.75 per cent to a seven-month high of $5.53. Photo / Salty Dingo

New Zealand shares, staging a quick turnaround, were inspired by two sets of economic data showing a resilient labour market and fast-improving dairy prices.

The S&P/NZX 50 Index went as low as 11,867 in the morning but at noon, after the release of the latest employment numbers, the index climbed steadily to close at 11,952.17 up 23.47 points or 0.2 per cent.

There were 59 gainers and 70 decliners over the whole market on increased volumes of 34.7 million share transactions worth $149.32 million.

Unemployment in the December quarter increased 4 per cent from the previous 3.9 per cent, lower than the 4.3 per cent expected by the market, and employment lifted 0.4 per cent compared with the September quarter – stronger than the forecast of 0.2 per cent.

Average weekly earnings, including overtime, for full-time employees increased 6.1 per cent to $1588 for the year ending December.

Mark Lister, investment director with Craigs Investment Partners, said the unemployment rate showed the labour market was a bit more resilient and the economy a little stronger than people expected.

“While inflation pressures are coming down there are still elements of strength out there which could make the Reserve Bank job harder. A cut in the Official Cash Rate is less likely over the next few months, and the gradual slowdown looks like a soft landing rather than a sharp recession.

“We don’t want to see widespread job losses as the price to pay for getting inflation down. The economy is holding together and people still have money to spend,” said Lister. “Investors are waiting for the deluge of company earnings this month.”

The latest global dairy trade auction saw the index rise 4.2 per cent with prices up 30 per cent on the August low. Whole milk powder increased 3.4 per cent to US$3463 a tonne; skim milk powder up 4.6 per cent to US$2758 a tonne; and butter rose 10.3 per cent to US$6516 a tonne, its highest since April 2022.

Lister said the global index is now at more than a 12-month high and the Fonterra midpoint milk price forecast of $7.50 per kg/MS is likely to be increased. “It sets the agriculture sector up for a good start to the 2024/25 season.”

The renewed confidence in the dairy sector helped push a2 Milk up 20c or 3.75 per cent to a seven-month high of $5.53. Fonterra Shareholders’ Fund was up 2c to $3.38, and Synlait Milk gained 1c to 83c.

Ebos Group was up 31c to $36.90; Mainfreight collected $1.12 to $70.33; Ventia Services increased 12c or 3.49 per cent to a new high of $3.56; Cooks Coffee rose 3.5c or 13.21 per cent to 30c; T&G Global gained 4c or 2.16 per cent to $1.89; Third Age Health added 3.3c or 2.35 per cent to $1.44; and Pacific Edge was up 0.006c or 6.32 per cent to 10.1c.

In the energy sector, Meridian gained 14c or 2.52 per cent to $5.70, and Mercury was up 9.5c to $6.89. Manawa, unchanged at $4.20, confirmed Clayton Delmarter as the new chief executive. He has held the interim role since September.

Fletcher Building, which reports its latest financial result next week, was down 7c to $4.17 after fending off speculation that it is considering a capital raise. Fletcher said the (Australian-based) news media report was inaccurate and is seeking to have the story removed.

AFT Pharmaceuticals rose 14c or 3.78 per cent to $3.84 after announcing it has launched its intravenous Maxigesic pain relief medicine in the United States market through its licensee Hikma Pharmaceuticals.

The first commercial sale will trigger a US$6m ($9.8m) fee to AFT and its Belgium development partner Hyloris Pharmaceuticals.

Port of Tauranga was down 8c to $5.35; Heartland Group declined 6c or 4.38 per cent to $1.31; SkyTV decreased 7c or 2.49 per cent to $2.74; Green Cross Health fell 9c or 6.98 per cent to $1.20; and Stride Property shed 3c or 2.17 per cent to $1.35.

Rua Bioscience, up 0.002c or 2.06 per cent to 9.9c, has formed a partnership with Canada’s Apollo Green and will provide medicinal cannabis strains for Apollo’s genetic library that includes more than 1000 cultivars. Apollo has sales channels in Europe, North America and Australasia.

Truscreen Group, up 0.001c or 3.85 per cent to 2.7, told the market it has gained approval to expand its cervical cancer screening in Mexico to the public health sector, instead of just private clinics.