Synlait Milk drives sharemarket to record high

Synlait Milk led the gainers, rising 14 per cent to $9.23.

New Zealand's S&P/NZX 50 Index rose to a record led by Synlait Milk, which jumped to an all-time high after posting strong first-half earnings growth. Synlait's partner A2 Milk Co also gained, along with Kathmandu Holdings and the Fonterra Shareholders' Fund.

The NZX 50 gained 121.14 points, or 1.4 per cent, to 8608.29. Within the index, 33 stocks rose, 10 fell and seven were unchanged. Turnover was $155.4 million.

Synlait Milk led the gainers, rising 14 per cent to $9.23. The company posted a record first-half net profit on increases in the manufacture and sales of high-margin products and its relationship with a2 Milk.

Profit jumped to $40.7m in the six months ended January 31, from $10.6m a year earlier, as revenue rose to $439.3m from $288.7m in the prior period.

"It's gone from hero to zero to hero again," said James Smalley, investment adviser at Hamilton Hindin Greene. "They have more than outperformed, they've surprised the market to the upside with a stellar performance and it's all sweetness and light in the share price now."

A2 Milk itself rose 3.6 per cent to $13.99 and Mercury New Zealand gained 3 per cent to $3.255.

Kathmandu Holdings gained 2.9 per cent to $2.47. The outdoor equipment retailer successfully raised $40m through an institutional share placement of approximately 18.5 million new fully-paid ordinary shares, it said in a release to the stock exchange. The company also intends to raise as much as $10m selling shares to eligible retail shareholders in Australia and New Zealand for the same $2.16 share price as institutional investors.

Units of the Fonterra Shareholders' Fund, which are entitled to the dividends from the dairy company's shares, rose 1.2 per cent to $5.90.

Fonterra Cooperative Group wrote down the value of its Beingmate Baby & Child Food investment by $405m, calling the performance of its Chinese partner "unacceptable".

The writedown and a $183m settlement with Danone led to a first-half loss.

The cooperative also lifted its forecast farmgate milk price to $6.55/kg of milksolids from the $6.40/kg it projected in December, reflecting the improvement in global dairy prices since then. The total cash payout is forecast to be in a range of $6.80 to $6.90.

Air New Zealand fell 0.2 per cent to $3.375. Regional economic development minister Shane Jones publicly called for the company's chair Tony Carter to resign, criticising Air NZ for withdrawing services to regional airports.

Jones cited the fact that the government owned 52 per cent of Air NZ and that the company needed to be responsive to its shareholders. Carter on Tuesday said he had written to Finance Minister Grant Robertson to underline the airline's independence.

NZX was the worst performer, down 0.9 per cent to $1.07, while Arvida Group fell 0.8 per cent to $1.19 and Goodman Property Trust dropped 0.7 per cent to $1.35.

Outside the index, Briscoe Group gained 1.1 per cent to $3.69. The company maintained its 19.8 per cent holding in Kathmandu by participating in the capital raising, buying 2.57 million shares from the institutional placement for a cost of $5.6m.