MARKET CLOSE: NZX 50 rises to 3-week high, led by Fletcher, Air NZ, Spark

Friday 25th November 2016

New Zealand shares rose, pushing the NZX 50 Index to a three-week high as gains in offshore equity markets helped sentiment in the domestic exchange. Fletcher Building, Air New Zealand and Spark New Zealand led the advance.

The S&P/NZX 50 Index advanced 16.36 points, or 0.2 percent, to 6,899.61. Within the index, 25 stocks rose, 16 fell and 10 were unchanged. Turnover was $113.5 million.

Equity markets rose across much of Asia today, although volumes are reduced by the absence of US participants, with the US celebrating its Thanksgiving Day holiday. The Nikkei 225 Index was up 0.2 percent and the Australia's S&P/ASX 200 Index was 0.5 percent higher in afternoon trading. That follows gains on Wall Street that nudged the Standard & Poor's 500 Index up 0.1 percent to a record close ahead of the Thanksgiving holiday.

Fletcher Building, which stands to benefit from the growing list of damaged buildings, particularly in Wellington, following the Kaikoura earthquake, rose about 2 percent to $10.82. Air New Zealand, which benefits from a weaker dollar making New Zealand a cheaper looking destination, rose 1.8 percent to $2.035 and Spark New Zealand gained 1.7 percent to $3.54.

"Offshore markets continue to show improvement and that has settled local investors' nerves," said Grant Williamson, a director at Hamilton Hindin Greene. "There's not the same foreign selling in our market that we had seen in the last couple of months."

Of companies making corporate announcements today, Warehouse Group ended the day unchanged at $2.90 after telling shareholders at their annual meeting in Auckland that an impairment of goodwill in its financial services business is “highly likely” after a weaker-than-expected first quarter trading in the new division. Warehouse stock has fallen 8.5 percent in the past five years, while the NZX 50 has soared 115 percent.

"Warehouse has continued to disappoint investors somewhat for quite some time," Williamson said. "They've done a fair amount of restructuring but they're not quite getting the traction investors were hoping for."

Turners fell 0.9 percent to $3.52 after the financial services firm posted a 15 percent gain in first-half profit and said all its businesses were expected to lift earnings in the full year. The stock has gained 18 percent this year.

"Turners had a nice run up ahead of this and the result was a little bit better than guidance," Williamson said. "It is "a very progressive company, growing at a pretty fast rate. The price has come off the boil now the news is out there."

Hellaby Holdings rose 1.5 percent to $3.29 after its biggest shareholder, the Hugh Green Trust-owned Castle Investments, said an offer at $3.30 a share from Australia's Bapcor was "compelling".

Abano Healthcare was unchanged at $8.41 after Anya and Peter Hutson and James Reeve of Healthcare Partners put up a new partial takeover offer, resetting the clock for a deal, amending the offer price wording to allow for an Abano dividend, and removing material that Abano had objected to.

BusinessDesk.co.nz

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