Shares gain on A2, Synlait, Comvita bounce
The S&P/NZX50 Index gained 29.25 points, or 0.4 per cent, to 8083.06. Within the index, 24 stocks rose, 18 fell and eight were unchanged. Turnover was $211 million. A2 Milk led the index higher, up 6.1 per cent to $8.42. The stock fell as low as $7.45 Wednesday, and ended the session down 8.4 per cent.
“It’s bouncing back up again, and that’s certainly underpinning the market”, said James Smalley, senior advisor at Hamilton Hindin Greene.
The bulk of the dual-listed stock gets traded in Australia, which has a lot more momentum-based trading “which does tend to mean that the moment momentum turns, it exacerbates movements in both directions,” Smalley said.
“If it was solely listed in New Zealand, you might not see that kind of volatility.”
A2’s supplier Synlait, which dropped 6.2 per cent Wednesday, rose 3.9 per cent to $8, and Comvita gained 1.9 per cent to $8.15, having fallen 6 per cent Wednesday.
“The negative momentum in that stock is pretty savage for investors,” Smalley said. “It is relatively thinly traded, so if you get a couple of fund managers trying to sell at the same time it can have a serious effect on the share price.”