Fonterra Shareholders’ Fund Units rose on New Zealand’s market after the dairy co-op hiked its earnings guidance.
The S&P/NZX 50 index edged up by 6.2 points on Thursday, or 0.05%, to 11,617.14. Turnover was $130 million.
The dairy co-op lifted its earnings guidance to 50-70 cents per share, implying earnings of between $806.2m and $1.13 billion, from 45-60 cents per share, or $725.5m-$967.4m.
Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, said Fonterra’s news was the “story of the day”.
“They put a lot of money into our economy and it’s a strong result from them,” he said.
“The earning per share of 50-70 cents was quite a wide guidance range to give – which would indicate the uncertainty that they’re having in this trading environment. But I would expect that to flow through to increased dividends.”
The units give outside investors access to Fonterra’s earnings stream, whereas the shares are owned by farmers who are typically more focused on the milk price.
Fonterra Shareholders’ Fund units jumped as high as 6% earlier in the day but closed up 4.7% to $3.14.
Rural Land Co still plans to expand its foreign investor base, the company reiterated at its annual meeting yesterday, with its chair telling shareholders that productive and low carbon intensity rural land globally is an “increasingly scarce resource”.
“I am still surprised foreign investors seem to understand this better than many domestic investors,” independent chair Rob Campbell said. “Despite the critical role agriculture plays in our economy.”
Shares in Rural Land Co were up 2.9% to $1.08 by early evening.
NZ King Salmon’s shares soared 16.3% to 25 cents. The stock has had an up-and-down week following two appeals being lodged against its open ocean farming project, Blue Endeavour.
