NZX Gets A Boost From Optimism And Easing Virus-driven Death Toll - 5 Stock Winners

Thursday, 9 April 2020, 11:24 am
Press Release: Kalkine

New Zealand seems to be unlocking the initial success of its lockdown measures with the slowdown of coronavirus transmission cases in the country.

In the daily press conference on Tuesday, Director-General of Health, Dr Ashley Bloomfield updated that 54 new COVID-19 cases have been recorded - the lowest number in the past two weeks in New Zealand, taking the country’s total number of cases to 1160 where majority of cases have been linked with overseas travel.

Dr Bloomfield further highlighted that 241 people have recovered from the coronavirus infection, and only 2% of the new cases involve community transmission.

With the police-enforced lockdown and continuous increase in the capacity of testing, New Zealand has been successful in flattening the curve of fatalities in the current phase. To date, the country has reported just one COVID-19-related death of a senior citizen in Greymouth.

Prime Minister Jacinda Ardern announced a four week level-4 nationwide lockdown on 25 March 2020 in a bid to contain the community transmission of the virus. Ardern further confirmed that New Zealand remains on track with the stimulus package, including the payment of $6.6 million to over a million New Zealand workers through the wage subsidy scheme.

Although the discussions over lockdown-exit spurge in the country, the government’s initial yet consistent steps towards flattening the infection curve have been sending a positive signal to the stock market.

Let us look at 5 stock winners that are receiving the positive market sentiments to continue their bull run despite the coronavirus turmoil.

The a2 Milk Company Limited

The a2 Milk (NZX: ATM) is listed on both New Zealand and Australia’s stock exchanges. The company is engaged in the production of natural a2 Milk™ along with the nutritional products for children and infants.

ATM’s stock price has soared by over 34 percent in the past two years with the sharp upside rally witnessed recently. The Infant formula producer saw its share price rising by 6.41 percent since lockdown (25 March 2020) to close at $17.930 on 8 April 2020. In the recent media updates, the fast-growing a2M announced its increased interest in Synlait from 17.4 percent to 19.8 percent. The company also announced its entry in the Canadian market with exclusive licensing agreement with Agrifoods Cooperative now in place.

EBOS Group Limited

EBOS Group Limited (NZX: EBO) has been another stock winner as the chances of the country evading the rise in virus infections are surfacing. EBOS Group is a diversified marketer, distributor and wholesaler of the medical, pharmaceutical and healthcare products in the Australasian market.

Since the outbreak of coronavirus, the business activities have sharply increased in the healthcare industry to fight the pandemic. Given the New Zealand Government’s meticulous efforts to contain the community transmission of virus, the healthcare pioneer EBOS witnessed a whopping increase of around 15 percent in its day-trading session on 24 March 2020. EBO stock price soared by 2.53 percent or $0.550 to close at $22.25 on Wednesday 8 April 2020.

Spark New Zealand Limited

Another dual-listed stock, Spark New Zealand Limited (NZX: SPK) has witnessed a consecutive three-day rise amidst the optimistic trend around the telecommunication and digital services players in this time of emergency lockdown. Driven by the upbeat in momentum, Spark New Zealand’s stock surged 2.33 percent to close at $4.400 on Wednesday, 8 April 2020, with the total gain of around 3.77 percent in the last three days.

The company recently announced the establishment of its two new committed revolving bank facilities, following which the stock on 2 April rose by 0.93% intraday.

Port of Tauranga

New Zealand’s cargo gateway, Port of Tauranga (NZX: POT) seems to mirror the upbeat in optimism as it continued its rally, with the stock closing at $6.81 on 8 April 2020.

On the first day of level-4 alert, the company announced its strategic alliance with Kotahi, which is a containerized freight exporter, propelling the stock rise by 5.69%. Although Port of Tauranga has withdrawn its earnings guidance amidst the economic uncertainty, it comfortably paid its interim dividend and continues to focus on the unimpeded flow of essential goods.

Synlait Milk Limited

The stock movement of Synlait Milk (ASX: SML) seems to be driven by the New Zealand Health Ministry’s announcement on the slowing number of Covid-19 cases. The packaged food company recorded an upswing of over 37 percent in its stock price since the nationwide lockdown (25 April 2020). On 8 April 2020, SML stock price closed at $7.300, up 4.14 percent or $0.290 in a day’s trading session.

New Zealand’s benchmark S&P/NZX 50 Index crossed 10,000 points after almost a month with positive wave emerging from the flattening of the new infections curve, providing some impetus to the sluggish travel/tourism, aged care and retail sectors.

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