Milk companies lead NZ stocks higher
By Sophie Boot
New Zealand shares have risen as A2 Milk Co extended its rally to new record and Xero and Sky Network Television advanced in a quiet market.
The S&P/NZX 50 rose 66.9 points, or 1.1 percent, to 6292.43 today, a record high.
Within the index, 29 stocks rose, 14 were unchanged and 7 fell. Turnover was $87 million.
A2 Milk continued its pre-Christmas rally, rising 15 percent to $2.27. The stock closed above $2 for the first time today, and has more than doubled in value since December 17, when the company announced a second earnings upgrade for the year.
The share price has risen 240 percent this year, spurred by strong Chinese demand for infant formula.
"When people invest in small, rapid-growth companies - which A2 is - you get a real surge of interest and stocks tend to be well supported," said Shane Solly, director, portfolio manager and research analyst at Harbour Asset Management, which owns A2 Milk shares.
The stock's rally comes as other listed dairy producers gain across Australia and New Zealand. Synlait Milk rose 0.7 percent to $3.07 on the NZX, while ASX-listed Bega Cheese advanced 13 percent to $7.24 and Blackmores rose 2.7 percent to $5.60. ASX-listed formula producer Bellamy's Australia rose 6.8 percent to $15.50.
"There's a group of similar stocks that are all getting enthusiastic support for dairy-based products, be they at the more technical end like A2 or the more basic end like Bega in Australia," Mr Solly said.
In other stocks, Xero rose 3.3 percent to $19.58, and Chorus was up 2.1 percent to $3.88.
Sky TV rose 2.4 percent to $4.64. The stock has recovered after dropping as low as $4.19 on December 15, but has fallen 25 percent this year amid concern it faces increased rivalry from companies such as Netflix and Apple's Apple TV.
Ebos was the worst performer on the market, down 2 percent to $14.40.
Goodman Property Trust fell 1.6 percent to $1.23, Stride Property fell 1.2 percent to $2.15, and Kiwi Property Group fell 0.4 percent to $1.34.