a2 leads market lower for a second day
The S&P/NZX 50 Index fell 19.82 points, or 0.2% to 12,639.19. Across the wider market, 111 of the 186 listed securities fell, and 30 rose. Market turnover was $188.6 million.
A2 Milk dropped 6.5% to $6.19 on a brisk volume of 3.3 million shares, extending its decline after the firm warned revenue will be even lower than previously expected and profit margins skinnier. The downgrade comes ahead of a review of the MSCI NZ Index, and exchange-traded funds will sell the stock if the milk marketing firm is dropped.
“We don’t think it will be out of the MSCI index, which is probably more a positive than a negative, but there’s a lack of confidence in management,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.
A2 Milk’s continued weakness comes as supplier Synlait Milk grapples with its own problems with profitability and as Fonterra weighs up overhauling its capital structure.
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