A2 Milk trading halt brings late excitement as stocks end lower - Market close

The Warehouse declined 3c or 2.44% to $1.20. Photo / Alex Cairns

Global marketer a2 Milk brought end-of-week excitement to the New Zealand sharemarket, rising more than 10% and then going into a trading halt as it finalises a potential acquisition.

After strong afternoon trading, the S&P/NZX 50 eased late in the day and closed at 12,457.451, down 34.17 points or 0.27%. The index was flat for the week and is ahead nearly 6% for the year.

There was continued heavy trading, with 50.39 million shares worth $210.92 million changing hands.

During the morning a2 Milk rose 69c or 11.31% to $6.79 after reaching a high of $7.05. It said it was going into a trading halt until Tuesday “to provide additional time to inform the market regarding a potential acquisition by us”.

Shane Solly, portfolio manager with Harbour Asset Management, said there was speculation that a2 Milk was buying another production facility.

This was consistent with its strategy of diversifying the source of production and creating growth with more products into the Chinese market – another production facility would be helpful.

Asked if he thought a2 Milk was buying one of Synlait’s facilities, Solly said: “There’s other assets they might be considering.”

Synlait increased 1.5c or 4% to 39c. A2 Milk has a 20% shareholding in Synlait, whose Dunsandel plant processes product for a2 under licence for China.

Solly said a2 Milk’s share price rise might also be benefiting from continued economic stimulus in China. “There’s been a range of different policies to improve liquidity and the cost of debt, and support the property and sharemarket. The Chinese economy is not growing as fast as it would like.”

The Shanghai Composite Index was up 2.52% to 3076.66 points at 5.45pm NZ time; the Hong Kong Hang Seng had risen 2.08% to 20,339.68; and the Japan Nikkei 225 had gained 1.57% to 39,538.58.

At home, the ANZ-Roy Morgan Consumer Confidence rose 3 points to 95.1 in September – the third straight month of improvement and the highest level since January 2022.

ANZ said confidence is still well below par and the lift was driven by expectations about the future, rather than views of the here and now. While interest rates are coming down, most mortgage debt is on fixed rates, which means most indebted households will not yet have experienced any meaningful relief.

Mercury Energy rebounded 16c or 2.61% to $6.30; Summerset rose 45c or 3.96% to $11.80; Port of Tauranga increased 26c or 4.41% to a 12-month high of $6.16; and Mainfreight collected 60c to $72.10.

Auckland International Airport, which increases its weighting on the NZX 50 to nearly 8%, was up 21.5c or 2.96% to $7.49.

Fletcher Building, which was hit by short selling earlier in the week, was down 16c or 5.54% to $2.73 after its credit rating of Baa3 was confirmed by Moody’s Ratings and its outlook revised from negative to stable.

Spark continued to slide, down 6c or 1.9% to $3.09 on speculation of global index weighting changes.

Fisher & Paykel Healthcare declined 90c or 2.47% to $35.50; Ebos decreased 72c or 1.97% to $35.85; Gentrack was down 45c or 3.91% to $11.05; Ryman Healthcare fell 18c or 4.04% to $4.27; SkyCity shed 5c or 3.47% to $1.39 and Turners Automotive declined 10c or 2.2% to $4.45.

Tower was up 4c or 3.13% to $1.32; My Food Bag gained 1c or 4.55% to 23c; and KMD Brands increased 3.5c or 7.61% to 49.5c. Michael Hill was down 2c or 3.64% to 53c; and The Warehouse declined 3c or 2.44% to $1.20.

Pole monitoring firm ikeGPS was down 4c or 6.25% to 60c after telling shareholders at the annual meeting that subscription revenue is expected to grow strongly this year, at 40% or greater compared with the previous year’s $15m. It was introducing AI-based automation capabilities into existing products and new products.