NZX 50 Rebounds as a2 Milk Co Bounces Back, Payments System Upgrade Proposed
New Zealand's S&P/NZX 50 index led Asia in gains, rebounding from a weak start to the week as a2 Milk Co bounced back from Monday's selloff. The company's shares rose 10% to $8.54 after a mixed response from analysts.
Mercury NZ and Vector were among the strongest performers, with Mercury posting a record result and hiking its dividend to 17 cents per share, while Vector lifted annual earnings by 20% in the first full year of the Commerce Commission's pricing reset.
Retailers Hallenstein Glasson Holdings, KMD Brands, and Briscoe Group were among the day's gainers as the Reserve Bank opened a consultation on upgrading the nation's payments system. The central bank said the upgrade could deliver economic benefits of $700 million to $1.3 billion by lowering transaction costs, raising productivity, and bolstering competition.
Forsyth Barr analysts warned that a2 Milk Co's outlook was uncertain, saying 'if a2 Milk can successfully execute its China-label recovery strategy, the building blocks are in place for strong earnings growth from FY28 off a reset FY27 earnings base, but this is far from risk-free.'