Murray Goulburn shares fly as global dairy markets dive
Despite dairy commodity prices dropping globally, Murray Goulburn’s share debut on the Australian Securities Exchange (ASX) has been a strong one. Murray Goulburn is the largest of the Australian-owned dairy processors to list on the ASX.
Last Friday 3 July 2015, Murray Goulburn dairy group partially listed on the ASX to raise $500 million in capital.
The initial shares were sold at $2.18, up on the $2.10 issue price. By Monday the closing price was $2.42 although the shares experienced a slight drop Tuesday finishing at $2.32. As of Wednesday 8 July at 11:30am, prices were back at $2.40.
More than 8 per cent of the company’s shares were traded on the first Friday and Monday.
Murray Goulburn is using its $500 million from the float to invest in infrastructure and to assist with overseas expansion.
Meanwhile global milk prices in glut…
Cheese and milk powder prices fell an average 5.9 per cent last week on the Global Dairy Trade.
Butter Milk Powder is down 8.1 per cent from its previous trading event and cheddar has dropped 4.9 per cent.
The dropping prices have been attributed to excess supply of milk in global markets. Numerous large dairy processing groups around the world have been investing over the past 2 years in increased capacity. However, some commentators believe that the long-term demand for milk in Asian markets such as India and China will continue to grow. On the other hand, EU producers and Asian producers may also be benefitting from government financial incentives to become more competitive in supplying dairy products to key Asian markets.