Synlait Milk and Mainfreight Take Hit As NZ Sharemarket Down

The New Zealand sharemarket fell after shares in Synlait Milk and Mainfreight dropped on the back of downbeat market updates. On Wednesday, the S&P/NZX 50 Index closed down 0.62% or 80.44 points, falling to 12,855.97, after 31.1 million shares changed hands to the value of $122.12m. The S&P/NZX 20 index closed at 7537.53, down 0.67%, while the S&P/NZX 10 index ended the day at 12,600.15, falling 0.73%. There were 57 gainers on the main board and 76 decliners.

The market reacted strongly to the news of manufacturing “challenges” at Synlait Milk’s flagship plant at Dunsandel, in Canterbury. Synlait said it expects to report a big lift in its underlying earnings for the current year and for its net bottom-line loss to shrink. Hamilton Hindin Greene investment adviser Jeremy Sullivan said the manufacturing issues could potentially lead to delays for a2 Milk to get its product to market. “The new chief executive for Synlait came out and said we don’t expect to need any more capital and we’re well within our competencies and tried to reassure investors, but investors are voting with their feet,” Sullivan said. Synlait’s share price fell 7.69% to $0.60 while a2 Milk shares dipped 1c to $8.80.

Mainfreight’s annual shareholders’ meeting was met with a poor response from investors, after the business said it had a slow and disappointing start to the financial year. Its share price fell late in the day by $6.36 or 9.58% to $60.00 with $8.86m worth of shares traded hands.

Elsewhere, the Government gave the green light for Kiwibank to raise up to $500m of capital to help the bank grow. Sullivan said the market would absolutely welcome the move, and the Government would likely get a good price for it as well. “Look at the likes of the gentailers and how well that’s actually worked out in terms of the government maintaining their controlling stake in the businesses and the share prices. They got their cake and got to eat it too.”

Air NZ announced it had found a replacement for outgoing chief executive Greg Foran, with current chief digital officer Nikhil Ravishankar appointed as his successor. Its share price remained flat following the announcement on 58c.

Meanwhile, Ryman Healthcare’s share price rose 1.22% or 3c to $2.49. following its annual shareholder meeting. Ryman chief executive Naomi James highlighted the changes the business is making to turn its fortunes around. Ryman had 903,906 shares change hands worth $2.24m.

Meanwhile, offshore investors digested several significant earnings reports, as well as merger announcements in the rail and energy sectors, ahead of major economic news catalysts later in the week. “After reaching all-time highs, markets are going to take a wait-and-see attitude,” said Art Hogan of B. Riley Wealth Management. The Dow Jones Industrial Average finished down 0.5% at 44,632.99. The broad-based S&P 500 shed 0.3% to 6,370.86, while the tech-rich Nasdaq Composite Index declined 0.4% to 21,098.29. Both the S&P 500 and Nasdaq had finished at records on Monday.

Source: Business Desk

Ahead of the local open SPI futures were 21 points lower at 8694.

- close [Morningstar with AAP]: The local share market has spiked to near-record levels after cooler-than-expected inflation paved the way for the Reserve Bank to cut rates next month.

The benchmark S&P/ASX200 index on Wednesday came less than a point away from eclipsing its July 18 record for its highest close ever, rising 51.8 points, or 0.6 per cent, to finish at 8,756.4. The broader All Ordinaries gained 48.7 points, or 0.54 per cent, to 9,015.4.

In late afternoon trading, the ASX200 also moved less than four points away from breaking its intraday record of 8,776.4, also set on July 18.

The ASX200 began the day in the green, but gains accelerated following the Australian Bureau of Statistics' release of the June quarter consumer price index. The report is widely seen as the key data point in determining whether the Reserve Bank will cut rates next month.

Trimmed mean inflation ??? the RBA's preferred metric ??? came in at 2.7 per cent year-on-year to June 30, in line with expectations and down from 2.9 per cent for the year to March 31. Headline inflation printed at 2.1 per cent, slightly below the 2.2 per cent market forecast.

Betashares chief economist David Bassanese, one of the few who correctly predicted no rate cut this month, said an August cut was now a "done deal", and projected further cuts in November and February.

Economists at ANZ, J.P. Morgan, Commonwealth Bank, NAB and AMP echoed this sentiment, with NAB's Tapas Strickland stating an August cut was effectively locked in.

Six of the ASX's 11 sectors finished higher on Wednesday, while five closed lower.

The consumer staples sector led gains, climbing 1.3 per cent as Coles advanced 1.7 per cent and Woolworths added 1.6 per cent.

All big four banks finished higher:

CBA and Westpac both rose 1.6 per cent to $176.99 and $33.72, respectively;

ANZ climbed 1.3 per cent to $30.70;

NAB added 0.7 per cent to $38.47.

In the mining sector, West African Resources surged 3.9 per cent to $2.39 after reporting its Kiaka gold mine in Burkina Faso was ramping up to full commercial operations following its first gold pour on June 26.

IGO fell sharply by 7.2 per cent to $4.64 after disappointing Q4 production results at its Greenbushes lithium mine in WA.

Mineral Resources rose 2.3 per cent to $30.78, with RBC Capital Markets calling it a "strong operational finish to FY25".

Pilbara Minerals added 3.0 per cent to $1.725 after announcing a 4 per cent increase in quarterly production.

Among majors:

BHP dipped 0.5 per cent to $40.22,

Fortescue rose 0.6 per cent to $18.19,

Rio Tinto lost 1.0 per cent to $115.81.

Post-market, Rio Tinto reported a $US4.5 billion ($6.9 billion) half-year profit, down 22 per cent year-on-year. The miner said the result was "very resilient" given iron ore prices fell 13 per cent and its WA operations were disrupted by Cyclone Zelia in Q1.

The Australian dollar weakened slightly to 65.12 US cents, from 65.25 US cents on Tuesday.

ON THE ASX:

The benchmark S&P/ASX200 index on Wednesday gained 51.8 points, or 0.6 per cent, to 8,756.4

The broader All Ordinaries added 48.7 points, or 0.54 per cent, to 9,015.4

Currency Snapshot:

One Australian dollar buys:

65.12 US cents (down from 65.25)

96.36 Japanese yen (down from 96.69)

56.37 euro cents (up slightly from 56.35)

48.76 British pence (down from 48.88)

109.20 NZ cents (down from 109.32)

Companies Holding Annual General Meeting (ASX 300):

ALS Limited

[Morningstar with Dow Jones]:

U.S. stocks ended mixed. The DJIA fell 0.4% to 44,461.28, the S&P 500 slipped 0.1% to 6,362.9, and the Nasdaq gained 0.1% to 21,129.67.

Among S&P 500 companies, the top three gainers were Generac Holdings Inc GNRC surging 20.16%, Teradyne Inc TER jumped 18.87%, and Humana Inc HUM lifted 12.42%.

The biggest decliners were IDEX Corp IEX which dropped 11.29%, Old Dominion Freight Line Inc ODFL fell 9.66%, and Freeport-McMoRan Inc FCX lost 9.46%.

Asia

Chinese shares closed mixed. The benchmark Shanghai Composite Index rose 0.2% to 3,615.72, and the Shenzhen Composite Index slipped 0.7% to 2,205.79.

Hong Kong shares ended lower. The benchmark Hang Seng Index fell 1.4% to 25,176.93.

Japanese shares closed flat. The Nikkei Stock Average was unchanged at 40,654.7.

India shares ended higher. The BSE SENSEX added 0.2% to 81,481.86.

Europe

Stocks in the U.K. finished flat. The FTSE 100 Index was unchanged at 9,136.94.

In Europe, shares closed higher. Germany's DAX rose 0.2% to 24,262.22, and France's CAC 40 increased 0.1% to 7,861.96.