Market close: a2 Milk shares dive on news of another potential class action

A2 Milk was down 20c or 2.6 per cent to $7.48. Photo / 123RF

News of another potential class action stopped a2 Milk's recovery dead in its tracks and the New Zealand sharemarket took a dive after trading strongly earlier in the day.

The global milk marketer issued a note early afternoon, saying it was not aware of any legal proceeding having been filed by Auckland-based Shine Lawyers at this time. After two days of strong rises, a2 Milk was down 20c or 2.6 per cent to $7.48. It had earlier hit $7.76.

At that time the S&P/NZX 50 Index had reached an intraday high of 13,167.15 but it closed at 13,125.98, up 11.74 points or 0.09 per cent, with a late surge in the matching session.

There were 62 gainers and 72 decliners over the whole market of 185 stocks with the addition of Greenfern Industries. A total of 39.38 million shares worth $129.02 million changed hands.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said a2 Milk was again making headlines and fell more than 5 per cent from its high.

"The Aussies were quite bullish about a2 Milk and began selling when news of the potential lawsuit filtered through. This dragged our market down, as did Fisher and Paykel Healthcare."

Sullivan said the local market was presently having a tug of war between investment inflows and interest rates. With people getting out of rental properties and term deposits, the capital is available. But the rising interest rates will create headwinds for some individual businesses. The flipside is that rates will only go up if the economy is doing well.

The NZ dollar continued to strengthen, reaching a four-month high of US71.86 against the American greenback at 5.45pm NZ time. The Kiwi hit US72.19c earlier in the day.

Market leader Fisher and Paykel Healthcare fell 60c or 1.94 per cent to $30.30. Sullivan said Fisher and Paykel had 95 per cent of its revenue in US dollars and this no doubt weighed on the company's share price.

Taranaki-based Greenfern Industries, the third medicinal cannabis firm to list on the main board, made a bright debut, rushing 16.5c or 66 per cent to 41.5c. The others Cannasouth and Rua Bioscience traded at 39.5c and 41c respectively.

Mainfreight rebounded $1.40 to $90.10; Summerset Group Holdings increased 25c to $14.90; Ebos Group rose 54c to $35.84; Meridian was up 17c or 3.49 per cent to $5.04; and Contact gained 6c to $8.19.

Fonterra Shareholders' Fund rose 8c or 2.06 per cent to $3.96; Port of Tauranga was up 8c to $6.78; South Port New Zealand collected 34c or 3.72 per cent to $9.49; and Briscoe Group gained 8c to $7.

Vector was up 1c to $4.04 after reporting a 1.7 per cent increase in electricity connections and 2 per cent for gas during the September quarter compared with the previous corresponding period. Vector has seen 8.5 per cent growth in advanced meter installations over the past year.

Automation solutions provider Scott Technology surged 29c or 10.39 per cent to $3.08 after reporting a 154 per cent rise in net profit to $9.52m on revenue of $216.1m, up 16 per cent, for the year ending August 31. It is paying a final dividend of 4c a share on November 22.

Scott had record operating earnings (ebitda) of $22.1m, and it has a strong pipeline of contracts in Europe, United States, China and Australasia, including a new $20m project to develop an automated appliance production line for a US global manufacturer.

AMP was up 3c or 2.56 per cent to $1.20 after telling the market its Australian assets under management remained steady at A$131.2b ($137b) during the third quarter, net cash outflows improved to A$1.4b, from A$1.8b in the same period last year.

Restaurant Brands, now operating 352 fast food stores, declined 12c to $15.46 even though sales increased 1.6 per cent to $243.6m for the September quarter, and total sales for the year to date were up 25.8 per cent to $784.3m.

Seeka upgraded its full-year net operating profit guidance to $15m-$17m, from $13.5m-$16m, and its share price was unchanged at $5.12. Seeka expects its profit could rise to $22m-$24m after receiving a share of the distribution from the settlement of the kiwifruit claim against the Crown.

Transport technology firm EROAD plunged 41c or 7.44 per cent to $5.10 after providing its second quarter update that saw contracted units grow by 2348, mainly in New Zealand and Australia, and challenging conditions in United States. EROAD expects full-year revenue growth of 10-13 per cent and operating earnings (ebitda) similar to last year's.

Other decliners were Stride Property, down 5c or 2.06 per cent to $2.38; Skellerup Holdings decreasing 7c to $6.03; Hallenstein Glasson dropping 8c to $7.02; and DGL Group shedding 6c or 1.82 per cent to $3.24.