MARKET CLOSE: NZ shares rise with global rally on China, ECB; A2, Xero, Summerset gain

Tuesday 16th February 2016

New Zealand shares rose as part of a global rally underpinned by more stable Chinese equities and comments from the European Central Bank that it will do whatever it takes to underpin the regional economy. A2 Milk, Xero and Summerset Group led the benchmark index higher.

The S&P/NZX 50 Index rose 41.09 points, or 0.7 percent, to 6,075.37. Within the index, 29 stocks rose, 17 fell and four were unchanged. Turnover was $238 million.

China's CSI 300 index was up 2.9 percent in afternoon trading in Shanghai, heading for a second day of gains after the week-long Chinese New Year holiday. Japan's Nikkei 225 Index was up 0.5 percent and Australia's S&P/ASX 200 Index gained 0.8 percent.

A2 Milk, which markets milk, infant formula and other dairy products, rose 10 percent to $2.03. Xero, the cloud-based accounting service, rose 6.2 percent to $14.35, recovering from its lowest level in almost six months.

"China has opened quite well. We've seen a continuation of positive sentiment in a number of markets," said David Price, a broker at Forsyth Barr. "Xero's bouncing off what's been a pretty nasty fall. A lot of tech stocks offshore have had fairly sharp de-ratings of late."

A2 has been heavily traded by retail investors, particularly in Australia "where there has been a lot of positive press," he said. Those include reports on strong demand for infant formula in China and shortages in the domestic market.

Summerset, the retirement village operator, rose 3.1 percent to $4. Rival Ryman Healthcare rose 1 percent to $8.03 and was the most heavily traded stock by value, with $55 million of shares changing hands.

Among companies posting their results today, Opus International Consultants rose 3.4 percent to $1.21. The listed engineering firm posted a 36 percent drop in annual profit, although its New Zealand business increased operating earnings by 29 percent to $36.8 million.

Price said there was "a continuation of the positive pipeline" of work in New Zealand at Opus.

Tenon rose 3.9 percent to $2.65 after the Taupo-based wood processing, marketing and distribution company tripled first-half net profit, mainly due to an improving US economy driving demand in the American housing market.

Vista International Group jumped 8.2 percent to $4.60. The cinema software company, which is due to release its results this month, told the NZX today that it had no explanation for a 27 percent decline in its shares since early January.

“Without providing any pre-release of those results we can say that the business continues to trade strongly, has strong prospects in its markets and continues to generate good cash flows to support its ongoing activities,” said Vista’s director commercial and legal, Brian Cadzow.

New Zealand Refining rose 2.3 percent to $3.55 and Australia & New Zealand Banking Group climbed 2.4 percent to $25. Westpac Banking Corp rose 2 percent to $31.22 and Air New Zealand rose 2.6 percent to $2.78.

Nuplex Industries rose 0.6 percent to $5.03, having soared 30 percent yesterday on news that Allnex Belgium SA, which is controlled by Boston-based private equity firm Advent International, has proposed offering $5.55 a share for the company via a scheme of arrangement.

Diligent Corp rose 0.6 percent to $7.18, having jumped 27 percent yesterday after news it’s being acquired by venture capital firm Insight Venture Partners in a deal that values the governance software developer at $941 million.

Fletcher Building rose 0.7 percent to $6.85 ahead of its earnings tomorrow while Port of Tauranga, which reports on Thursday, gained 0.8 percent to $18.

BusinessDesk.co.nz

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