A2 Milk shares surge drive positive start to week - market close

Shares in a2 Milk rose 26c or 5.6 per cent to $4.90 after receiving a broker upgrade to a target share price of $5.15.

The New Zealand sharemarket started the week on a positive note, with a2 Milk surging nearly 6 per cent after finding renewed favour from investors.

The S&P/NZX 50 Index reached an intraday high of 11,713.34, but slipped slightly to close at 11,684.95, up 18.88 points or 0.16 per cent – following five successive down days last week.

There were 74 gainers and 62 decliners over the whole market on volumes of 17.95 million shares worth $63.29 million.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the local market made a modest gain following buoyant trading offshore, led by the technology stocks.

At the weekend, the S&P 500 in the United States hit an all-time high after rising 1.23 per cent to 4839.81 points, beating the previous record of 4796.56 set on January 3, 2022.

The Dow Jones Industrial Average was up 1.05 per cent to 37,863 points, and Nasdaq Composite increased 1.7 per cent to 15.310.97.

Across the Tasman, the S&P/ASX 200 index was up 0.66 per cent at 7470.5 points at 6pm NZ time.

Sullivan said the local market was getting primed for key inflation data this week “which will be a guide to how the Reserve Bank sets future cash rates”.

The market is expecting the December quarter consumer price index to increase 0.5 per cent – the lowest quarterly rise since 2020 – and annual inflation to fall to 4.7 per cent, below the Reserve Bank’s forecast of 5 per cent. It would be the lowest inflation rate since the second quarter of 2021.

ASB Bank said deceleration is expected for both tradable and non-tradable inflation, albeit by differing degrees. Falls for food prices and selected consumer durables should deliver a broadly flat quarter for tradable prices.

The unwinding of the price premium built up over the Covid period is expected to be the key catalyst heralding the return to sub 3 per cent inflation by the second half of this year, ASB said.

Global marketer a2 Milk rose 26c or 5.6 per cent to $4.90 after receiving a broker upgrade to a target share price of $5.15.

Sullivan said there has been a slew of positive sentiment towards a2 Milk since the announcement of a better-than-expected birth rate in China.

Ebos Group was up 42c to $35.94; Mercury Energy increased 9c to $6.50; Restaurant Brands gained 15c or 3.9 per cent to $4; Scott Technology added 9c or 2.85 per cent to $3.25; and Seeka rose 17c or 6.85 per cent to $2.65.

Genesis Energy, up 2c to $2.52, reported a strong second quarter. Retail sales increased to 1405GWh or $339.9m compared with 1343GWh or $300.7m for the previous corresponding period and customers grew 4560 to 493,215, up 2.5 per cent.

Retail sales to date were 3048GWh or $760.2m compared with the previous 2925GWh or $676.9m. The Kupe KS-9 drilling has finished and the first gas is expected to be produced in the third quarter.

Ventia Services reached a new high after gaining 6c or 1.76 per cent to $3.46; CDL Investments increased 2.5c or 3.07 per cent to 84c; ikeGPS improved 2c or 3.77 per cent to 55c; and Chatham Rock Phosphate rose 1.5c or 12.5 per cent to 13.5c.

Fisher and Paykel Healthcare was down 19c to $23.18; Mainfreight declined 45c to $70.90; Freightways shed 15c or 1.79 per cent to $8.25; Fletcher Building decreased 12c or 2.53 per cent to $4.63; Comvita fell 13c or 5.33 per cent to $2.20; and Port of Tauranga was down 14c or 2.59 to $5.26.

Winton Land tumbled 11c or 3.94 per cent to $2.68; Move Logistics was down 2.5c or 4.81 per cent to 49.4c; T&G Global declined 6c or 3.03 per cent to $1.92; Michael Hill decreased 3c or 3.16 per cent to 92c; and Vista Group shed 6c or 3.9 per cent to $1.48.

Property companies Investore was down 4c or 3.33 per cent to $1.16, and Stride declined 3c or 2.16 per cent to $1.36.

Cancer diagnostics company Pacific Edge, down 0.003c or 2.91 per cent to 10c, told the market that the number of tests for the three months ending December declined 15.9 per cent to 7172 compared with the previous quarter, mainly reflecting the reduction in sales team from 34 to 17.

Software firm Blackpearl Group increased 2.5c or 5.26 per cent to 50c after reporting that subscription revenue reached $1.2m at the end of December, up 29 per cent from the previous quarter. Annual recurring revenue totalled $5.5m, up 20 per cent.