Market close: Fletcher Building reaches two-year high, a2 Milk falls below $8

Fletcher Building CEO Ross Taylor. Photo / File

Leading construction company Fletcher Building reached a new high and global marketer a2 Milk continued to slump as the New Zealand sharemarket closed the week with a gain of half a per cent.

The S&P/NZX 50 Index rose 73.16 points or 0.58 per cent to 12,650.64 in a late surge of trading, particularly in the leading energy stocks, after reaching an intraday low of 12,550.92.

There were 77 gainers and 59 decliners over the whole market on more-than-usual Friday volume of 45 million share transactions worth $225.08 million.

Fletcher Building reached a two-year peak, rising 16c or 2.24 per cent to $7.30. On March 23 last year it was sitting at $3.15.

Once a market darling, a2 Milk went below the $8 mark, falling 33c or 4.01 per cent to $7.90. It's a far cry from its all-time high of $21.51 achieved on July 30 last year.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said there's plenty of demand for new housing and building products, and Fletcher provides a lot of that. The stock has been re-rated after its downgrade a few years back.

He said a number of brands have entered the a2 Milk space and it is now facing increased competition. It has been struggling distribution-wise and there are signs the daigou sales channel in Australia is becoming more efficient and corporatised, rather than just relying on students and tourists taking the product back to China.

"I think in the next nine to 18 months a2 Milk will be through the worst part of its difficulties, and investors have been sending the stock down more than what it's worth."

Market leader Fisher and Paykel Healthcare continued to climb 40c to $34.80; Summerset Group Holdings was up 12c to $12; Scales Corporation gained 5c to $4.67; and Oceania Healthcare rose 7c or 5.19 per cent to $1.42.

Rural services company PGG Wrightson picked up 7c or 2.1 per cent to $3.40; Napier Port recovered 11c or 3.16 per cent to $3.55; and property companies Stride increased 5c or 2.19 per cent to $2.31 and Precinct gained 1.5c to $1.65.

Amongst the decliners, Restaurant Brands was down 15c to $13.01; The Warehouse Group declined 7c or 1.99 per cent to $3.45; South Port New Zealand decreased 10c to $870; fellow port company Marsden Maritime Holdings fell 9c to $6.15; and Vista Group was down 7c or 3.02 per cent to $2.25.

Auckland energy company Vector reported a slight increase in connections for the nine months ending March and its share price fell 4c to $4.11. For the period Vector had 588,018 electricity connections, up 1.7 per cent on March last year, and 116,014 gas connections, up 2.1 per cent. There was 8.7 per cent growth in advanced meters; a total of 1.82 million have now been installed in New Zealand and Australia.

Other energy stocks Mercury rose 26.5c or 4.05 per cent to $6.815, Meridian gained 20c or 3.64 per cent to $5.69 on trade worth $17.6m; and Contact increased 7c to $7.58 with 15 million worth of its shares changing hands.

As part of its business restructuring and transformation, AMP is demerging AMP Capital's private markets business of infrastructure equity and debt and real estate, after ending discussions with Ares Management Corporation about a possible sale. The company is creating two separate businesses – AMP Limited and Private Markets – and its share price rose 2c or 1.65 per cent to $1.23.

Just Life Group, which rose 4c or 4.17 per cent to $1, continues its busy acquisition phase, paying $17m to buy natural dietary supplements supplier About Health with existing debt facilities and an equity raising.

In the United States overnight, Wall Street had the biggest one-day slide since early March after it was indicated President Joe Biden is proposing to nearly double the capital gains tax rate for Americans earning more than US$1m ($1.39m) from 20 per cent to 39.6 per cent. Combined with an existing surtax on investment income, federal tax rates for the wealthiest investors could be as high as 43.4 per cent.

The Dow Jones Industrial Average fell 320 points or 0.94 per cent to 33,815.90; S&P 500 Index was down 0.92 per cent to 4134.98; and Nasdaq Composite also declined 0.94 per cent to 13,818.41 – despite 85 per cent of the leading index companies exceeding first-quarter results expectations, with earnings per growth now estimated at 33.3 per cent. Weekly jobless benefit claims continued to fall, and home sales are slowing with tight supply, pushing prices higher.