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MARKET CLOSE: NZ stocks gain; A2 Milk, Fletcher Building advance

Thursday 27th April 2017

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New Zealand shares rose, as Fletcher Building benefited from government plans to beef up infrastructure spending, A2 Milk continued to climb after upbeat guidance and SkyCity Entertainment Group and Xero continued to recover as jitters around European elections and geopolitical tensions abated.

 

 

The S&P/NZX 50 Index gained 19 points, or 0.3 percent, to 7,354.62. Within the index, 33 stocks gained, 14 fell and 3 were unchanged. Turnover was $116 million. 

 

 

"A little bit of the anxiety around Europe has eased," said Nigel Scott, director at Craigs Investment Partners. While US markets were tepid and several Asian markets retreated after US President Donald Trump's tax cut plan failed to inspire investors, New Zealand bucked the trend as the economy continues to underpin good returns, he said.  "There are not too many places to go at the moment (to invest)" and the New Zealand market "is still providing investors with some level of return as the fixed income market has gone soft." 

 

 

A2 led the index higher, rising 2.3 percent to $3.53 after it forecast revenue of $525 million in the year ending June 30, up from $352.8 million a year ago earlier this week. 

 

 

Fletcher Building added 2.1 percent to $8.48, continuing its recovery after Finance Minister Steven Joyce announced a boost to spending on transport infrastructure over the four years, in part to cover the rebuild of State Highway 1 in the South Island. In a pre-budget speech to the Wellington Chamber of Commerce, Joyce lifted the Crown's planned capital spend by $2 billion over the next four years to $11 billion on top of existing projects. 

 

 

Fletcher has come under significant pressure, sinking to a 12-month low last week on the back of an earnings downgrade. Metro Performance Glass also benefited from Joyce's announcement, adding 5.5 percent to $1.34. 

 

 

Scott said a number of stocks that lost ground in recent months, largely on global jitters, have recovered. Xero added 1.4 percent to $21.15 while SkyCity rose 0.2 percent at $4.49.

 

 

Summerset Group shed 1.9 percent to $5.19. Summerset's board came under pressure regarding its plans for wage-earners who won't benefit from a recent government-funded lift in caregiver wages at its annual meeting in Wellington but said it plans to be proactive.  Earlier this month the government announced it would implement a historic pay equity deal for aged and residential care workers worth $2.05 billion of extra pay over four years for some 55,000 people – close to 2 percent of the total New Zealand workforce. It also said it was beginning to see some impact from constraints in the construction sector, although it remains on track to build 450 new units this year. 

 

 

Synlait Milk ended unchanged at $3.50.  Earlier Thursday the company said it has gained a GRAS (Generally Recognised As Safe) notice from the US Food and Drug Administration to export lactoferrin to the US for use in infant and toddler milk formula.

 

 

(BusinessDesk)

 

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