New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Synlait Milk's (SML) FY23 result was operationally weak compared to our expectations, confirming what has been a difficult period.</li><li>Minimal outlook commentary was provided; we think the road ahead continues to look challenging, and balance sheet risks remain elevated if SML is unable to sell Dairyworks.</li><li>The three key issues currently are; (1) high gearing, (2) suppressed Advanced Nutritionals margins, and (3) an elevated cost base. </li></ul>

Synlait Milk's (SML) FY23 result was operationally weak compared to our expectations, confirming what has been a difficult period.Minimal outlook commentary was provided; we think the road ahead continues to look challenging, and balance sheet risks remain elevated if SML is unable to sell Dairyworks.The three key issues currently are; (1) high gearing, (2) suppressed Advanced Nutritionals margins, and (3) an elevated cost base. 

Synlait Milk - FY23 Result — The Worst Is Over?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.</li>
<li>There are a lot of implementations this week, with <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> on Thursday and then others across a bunch of countries on Friday.</li>
<li>There were big inflows to <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong (2800 HK)</a> during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.</li>
</ul>


There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.
There are a lot of implementations this week, with KOSPI 200 and KOSDAQ 150 on Thursday and then others across a bunch of countries on Friday.
There were big inflows to Tracker Fund of Hong Kong (2800 HK) during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.


Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gentrack-group-ltd" target="_blank" data-smartkarma-citation="entities:2752:1" rel="noopener">Gentrack (GTK NZ)</a> and <a href="https://www.smartkarma.com/entities/dorchester-pacific-ltd" target="_blank" data-smartkarma-citation="entities:1854:1" rel="noopener">Turners Automotive (TRA NZ)</a> will be added to the S&amp;P/NZX 50 Index while <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a> and <a href="https://www.smartkarma.com/entities/pacific-edge-ltd" target="_blank" data-smartkarma-citation="entities:20261:1" rel="noopener">Pacific Edge (PEB NZ)</a> will be deleted.</li>
<li>There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.</li>
<li>The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.</li>
</ul>



Gentrack (GTK NZ) and Turners Automotive (TRA NZ) will be added to the S&amp;P/NZX 50 Index while Synlait Milk (SML NZ) and Pacific Edge (PEB NZ) will be deleted.
There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.
The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.


S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

Thematic (Sector/Industry)

<ul><li>The Forsyth Barr Dairy Digest provides a snapshot of information relevant to New Zealand's dairy sector.</li><li>We include forecasts on the Farmgate Milk Price (FGMP), dairy production, on-farm costs and farm prices with supplementary information on lending, confidence, emissions, the infant formula market and our global analysis of the dairy industry. </li><li>This edition highlights that times are tough for farmers with volatile prices, subdued Chinese demand, and elevated operating and interest costs are pressuring on-farm profitability.</li></ul>

The Forsyth Barr Dairy Digest provides a snapshot of information relevant to New Zealand's dairy sector.We include forecasts on the Farmgate Milk Price (FGMP), dairy production, on-farm costs and farm prices with supplementary information on lending, confidence, emissions, the infant formula market and our global analysis of the dairy industry. This edition highlights that times are tough for farmers with volatile prices, subdued Chinese demand, and elevated operating and interest costs are pressuring on-farm profitability.

Forsyth Barr Dairy Digest - Edition 2 Cashflow Constraints

<ul><li>Synlait Milk (SML) has announced its intentions to divest its Dairyworks and Talbot Forest Cheese (TFC) businesses as part of its asset/capital structure review.</li><li>We estimate potential sales proceeds of ~NZ$150m using current earnings and applying prior transaction multiples.</li><li>A sale would reduce pro-forma FY23 net debt to ~NZ$275m (versus our current forecast of ~NZ$425m).</li></ul>

Synlait Milk (SML) has announced its intentions to divest its Dairyworks and Talbot Forest Cheese (TFC) businesses as part of its asset/capital structure review.We estimate potential sales proceeds of ~NZ$150m using current earnings and applying prior transaction multiples.A sale would reduce pro-forma FY23 net debt to ~NZ$275m (versus our current forecast of ~NZ$425m).

Synlait Milk: A Baby Step; Leaps Are Required

New Zealand

Seeka Limited operates as a produce company. The Company produces apricots, cherries, pears, plums, bananas, papaya, kiwiberries, pineapples, kiwifruits, and avocado. Seeka offers professional orchard management services to kiwifruit growers.

Allied Farmers Limited is a New Zealand regional rural servicing company.  The Company offers its clients access to a range rural services including merchandising and bulk farm supplies, advice and trading in livestock, crop advice, wool storage and handling facilities, financial services and specialized regional real estate services.

New Zealand Coastal Seafoods Limited provides and distributes marine products. The Company offers various types of seafood. New Zealand Coastal Seafoods serves customers in New Zealand.

Good Spirits Hospitality Limited operates as an investment company. The Company offers sustainable cash flows, organic growth, and acquisition services. Good Spirits Hospitality serves customers in New Zealand.

New Zealand King Salmon Investments Limited provides fish farming services. The Company produces, grows, and sells salmons products. New Zealand King Salmon Investments serves customers worldwide.

PGG Wrightson Limited is a farm service organization on the South Island, operating in Otago and parts of Southland. The Company's operations include wool scouring and dumping, wool and livestock trading, farming financial services, residential real estate and retail farming merchandising, which includes animal health and nutrition and pasture improvements.

Livestock Improvement Corporation Limited provides herd improvement services to farmers in New Zealand.  The services provided by the Company include herd testing, animal health management, on farm consultancy, progeny testing, DNA analysis, artificial breeding and research and development.

T&G Global Limited is a domestic and international fruit and produce wholesale company. The Company wholesales fruits, vegetables and fresh flowers. The Company also manufactures fruit and vegetable products like juices and other ingredients for the food and beverage industry.

Fonterra Cooperative Group Ltd is a New Zealand multinational dairy co-operative and its farmer shareholders are the suppliers of milk to Fonterra in New Zealand. The Company operates Fonterra Shareholders' Fund, which provides additional financial flexibility for farmer shareholders who would have the opportunity to sell economic rights of shares to the fund.

Sanford Limited owns and manages deepwater and inshore fisheries throughout New Zealand waters.  The Company also operates cool-storage, ship-building, engineering and aquaculture businesses.  The Company exports seafood throughout the world.  The Company's seafood products include orange roughy, squid, hoki, tuna, mussels and salmon.

Honworld Group Limited manufactures and sells cooking wine. The Company offers a mixture of naturally-brewed yellow rice wine and naturally-brewed cooking wine.

Foodwell Corporation processes agricultural products such as peeled chestnuts and produces strawberry syrups.  The Company also manufactures jam, juice, frozen fruits, and canned fruits.

Riverview Rubber Estates Berhad cultivates rubber and oil palm in Malaysia.

Seoul Food Industrial Co., Ltd. produces bakery goods and snacks.  The Company also manufactures animal feedstuff and food waste disposal system.

TS Flour Mill Public Company Limited operates as a flour milling company. The Company produces noodle, bread, biscuit, cake, dough stick, and steamed bun flour. TS Flour Mill serves customers in Thailand.

McLeod Russel India Ltd.  cultivates, manufactures, and markets tea. The Group owns tea estates in Assam and Dooars.

Besunyen Holdings Company Ltd. processes and markets tea.  The Company produces both traditional and herbal teas.

NICHIWA SANGYO CO., LTD. produces mixed feed with poultry feed as its main product line.  The Company also raises livestock for the purpose of bioengineering research.

Global Palm Resources Holdings Limited is an agricultural company. The Company's activities include cultivating oil palms, harvesting of FFB from our oil palm plantation, and processing them (together with purchased FFB) into CPO and palm kernels.

NICHIRYO BAKING CO., LTD. makes and sells bread and pastries.  The Company also operates restaurants and manages real estate.

Synlait Milk Ltd is a milk production company.  The Company produces, processes, markets and distributes milk, milk powder products and ingredients.

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Synlait Milk (SML NZ)

Synlait Milk - FY23 Result — The Worst Is Over?

Synlait Milk's (SML) FY23 result was operationally weak compared to our expectations, confirming what has been a difficult period.

Forsyth Barr

Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

As expected, Gentrack and Turners Auto will replace Synlait Milk and Pacific Edge in the NZX50 Index. The adds have jumped recently and there...

Brian Freitas

Forsyth Barr Dairy Digest - Edition 2 Cashflow Constraints

The Forsyth Barr Dairy Digest provides a snapshot of information relevant to New Zealand's dairy sector. We include forecasts on the Farmgate Milk...

Forsyth Barr

Synlait Milk: A Baby Step; Leaps Are Required

Synlait Milk (SML) has announced its intentions to divest its Dairyworks and Talbot Forest Cheese (TFC) businesses as part of its asset/capital...

Forsyth Barr

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52-week Range

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