NZ shares up, Fonterra gains on damages
The S&P/NZX50 Index rose 0.025 per cent, or 2.01 points, to 8188.83 on Friday. Within the index, 22 stocks rose, 21 fell and seven were unchanged. Turnover was $163m.
Fonterra Shareholders Fund units gained 0.6 per cent to $6.40. Fonterra cut its forecast for 2018 earnings forceast after an arbitration tribunal in Singapore ruled it must pay 105 million euros ($183m) to French food giant Danone over a botulism scare recall in 2013.
The dairy cooperative has now revised its forecast earnings per share range for the 2017-18 financial year to 35 to 45 cents, down from 45 to 55 cents. The decision wouldn’t impact the company’s forecast farmgate milk price, currently at $6.75 per kilogram of milk solids, it said.
“In the share price you’ve seen an element of relief, albeit on low volume,” JBWereNZ equity manager Rickey Ward said.
“It’s full and final, it provides clarity and therefore investors can start to analyse or take a view of the company on fundamentals now, rather than this issue that’s been lurking in the background. It could have been quite stressful for them if it had been at the upper end of what some people were suggesting.
He said the Fonterra news had dominated on Friday, and the market was quieter following Thursday’s $1.48 billion in turnover on MSCI reweighting.