MARKET CLOSE: NZ shares rise, led by Sky TV; SkyCity drops

Monday 14th March 2016

New Zealand shares rose, led by Sky Network Television which has been on an investor roadshow to rally up support, while power companies Contact Energy and Trustpower gained.

The S&P/NZX 50 index climbed 51.4 points, or 0.8 percent, to 6,566.83. Within the index, 30 stocks rose, 12 fell and eight were unchanged. Turnover was $147 million.

Sky TV led the index, rising 8.4 percent to $4.93, a five-month high. Investors have been wary of the company as it struggles to retain subscribers with growing competition from services such as Netflix, and faces higher costs to secure content in the increasingly competitive market.

"The companies, like Sky, that met a bit of selling pressure post results season - and noticeably it seems to be those sort of companies that have just started to embark on a global or Australasian roadshow - appear to be getting a bit of support," said Rickey Ward, NZ equity manager at JBWere. "I can only assume the story they're telling further afield has led to offshore buy-in, because the domestics have known about these issues for some time and they didn't buy it."

Stocks across Asia joined a global rally as revived investor sentiment pushed up demand for risk-sensitive assets. Japan's Nikkei 225 index was up 1.6 percent in afternoon trading, while China's Shanghai composite index gained 2.6 percent and Australia's S&P/ASX 200 index increased 0.3 percent.

Ward said companies with strong foreign ownership, such as the listed power companies, enjoyed a strong day. Contact Energy rose 3.5 percent to $4.73, Trustpower gained 3 percent to $7.63, and Mighty River Power increased 2.1 percent to $2.71.

Fonterra Shareholders' Fund increased 3.2 percent to $5.79. Last week Fonterra Cooperative Group cut its forecast payout to farmers to $3.90 per kilogram of milk solids, which is an input cost for the dairy processor, meaning a lower farmgate return increases earnings for the fund's unitholders.

Steel & Tube advanced 3.5 percent to $2.34. Metro Performance Glass advanced 2.5 percent to $1.66. Fisher & Paykel Healthcare Corp edged up 2.4 percent to $9.37.

Goodman Property Trust increased 1.6 percent to $1.30 after the property investor said its latest portfolio valuation increased by $135 million, or more than 6 percent.

Genesis Energy gained 1 percent to $2.07 after the power company said the interest rate on its $100 million of upcoming 6-year bonds was set at 4.14 percent.

The worst performer was SkyCity Entertainment Group, down 3.8 percent to $4.51.

Spark New Zealand fell 1.9 percent to $3.59 after the country's biggest telecommunications company announced a $100 million facility with Bank of New Zealand, which it will use to refinance debt.

Tower shed 3.3 percent to $1.76, and Vital Healthcare Property Trust dropped 2 percent to $2.

BusinessDesk.co.nz

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