MARKET CLOSE: NZ shares rise as blue-chips Spark, Fletcher recover; top performers A2, NZX fall

Tuesday 22nd December 2015

New Zealand shares rose as blue-chip stocks Spark New Zealand and Fletcher Building bounced back from recent dips, while the month's stronger performers, A2 Milk Co and NZX, gave up some of their gains.

The S&P/NZX 50 Index rose 27.15 points, or 0.4 percent, to 6147.97. Within the index, 20 stocks were up, 19 were down and 11 were unchanged. Turnover was $151.7 million.

Overnight, Wall Street ended on a positive note with the Nasdaq Composite Index advancing 1 percent, the Standard & Poor's 500 Index rising 0.8 percent and the Dow Jones Index up 0.7 percent. Asian markets were more mixed, with China's Shanghai Composite index down 0.5 percent in afternoon trading, Japan's Nikkei 225 index edging up 0.02 percent, and Australia's S&P/ASX 200 index up 0.2 percent.

"The US market is up, and that has provided a mildly positive tone to stocks, but the market is basically dead flat," said James Lindsay, who helps manage about $400 million in NZ equities at Nikko Asset Management. "The big performers have let back some of the gains and the underperformers have bounced back a little bit."

Spark rose 3.2 percent to $3.24, a two-week high and leading the benchmark index higher. The stock had fallen 7.6 percent from $3.40 since Dec. 1. Fletcher Building rose 1.1 percent to $7.11, after falling 4.6 percent to $7 since the start of the month.

"Spark and Fletcher Building have had a couple of weak days, and really they're just bouncing back," Lindsay said.

Xero rose 2.5 percent to $18.40. Founder Rod Drury told the Australian Financial Review Xero's initial public offering in the US would not happen for at least a year, so the company can build more of a track record for investors to judge. Yesterday, Xero appointed former Spark general manager of digital first Anna Curzon as its new New Zealand managing director.

Stock market operator NZX performed worst today, down 2.8 percent to $1.04. The shares had gained 12 percent this month.

"If you look at the previous three trading sessions, that stock had risen 7-odd percent, so for it to fall 2.8 percent is not too much of a surprise," Lindsay said.

A2 fell from its recent rally, falling 2.4 percent to $1.62. The stock had risen 51 percent to a record $1.66 over the past two days after the milk marketer raised its forecast for 2016 operating earnings for a second time this year.

"The last three trading sessions there's been 25 million dollars worth of shares go through on average for each session, that's an extremely high turnover for that name," Lindsay said.

AFT Pharmaceuticals rose 11 percent to $3.10 in its NZX debut, after raising $35.6 million in an initial public offering. The funds raised will go towards clinical trials and entering new international markets.

Outside the NZX 50, Pushpay Holdings rose 6.4 percent to $6.28. It said today it met continuous disclosure obligations in response to a 'please explain' notice from the NZX over a 22 percent slump in the share price.

Vista Group International was unchanged at $5.79, and has risen 52 percent this year. The cinema software and analytics firm renegotiated its agreement with Virtual Concepts and increased its deferred consideration payment by up to $900,000.

Mercer Group was unchanged at 0.051 cents, and has fallen 75 percent this year. The stainless steel fabricator and manufacturer today entered into an unconditional sale and purchase agreement to sell its interiors division, which it said was loss-making in its annual report. The division has been sold to an entity majority owned by Ivan Ramsey, the current general manager of the division, for $2.15 million. The company reported a group loss of $7 million for the year to June 2015, and breached its banking covenants.

BusinessDesk.co.nz

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