by BusinessDesk
The S&P/NZX 50 Index fell 134.76 points, or 1.1 percent, to 12,224.5. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was $178 million.
Synlait had already forecast its annual net profit would be approximately half the 2020 financial year result, today it said it will not even hit that target.
Ongoing uncertainty from the company’s cornerstone shareholder and strategic partner, A2 Milk, on its expected demand has been a significant factor in the downgrade.
The infant formula marketing firm hit hard times late last year as the pandemic significantly hampered distribution through grey market daigou channels.
A2 Milk fell a further 0.9% to $10.01 - now down 45% in the past six months - while Synlait plummeted 10.1% bringing its six-month loss to 38% at $3.46.
They are now the two of the worst performing stocks on the NZX 50, which itself is down almost 6% this year.
The index took another whack today as bond yields climbed after holding still for several days. Equity prices have been retreating as inflation expectations return and interest rates rise.
Vista Group International fell 4% to $1.69 after a strong run following a good earnings report, and Auckland International Airport also fell 4% to $7.03.
Almost all electricity stocks declined at least 2%. Meridian Energy fell 3.7% to $5.675, while Contact Energy was the only generator to avoid the carnage - down just 0.4% at $7.
In total, more than 11 stocks were down more than 2% including the index’s largest, Fisher & Paykel Healthcare, which dropped 2.9% to $28.
Still, it was not all doom and gloom. ANZ Bank jumped 2.8% to $30.32 and SkyCity Entertainment was up 2.6% at $3.21.
Freightways advanced 1.2% to $10.98 after Forsyth Barr gave the domestic logistics company an ‘outperform’ rating and a target price of $11.
The analysts said in a note that a favourable pricing environment was a key driver for the rating.
“We continue to expect the parcel industry pricing dynamic to be a driver of a growing industry profit pool,” they wrote.
Global logistics firm Mainfreight also made gains, rising 2.2% to $68.60, against the market.
The kiwi dollar was trading at 72.46 US cents at 5pm in Wellington, down from 72.85 cents yesterday.
The trade-weighted index was at 75.19 at 5pm, from 75.46 yesterday. The kiwi traded at 93.08 Australian cents from 93.11 cents, 77.57 yen from 77.85 yen, 60.12 euro cents from 60.30 cents, 51.98 British pence from 52.17 pence, and 4.6885 Chinese yuan from 4.7070 yuan.
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