MARKET CLOSE: NZ shares rise; A2 gains after placement, Contact, Fletcher advance

Monday 12th October 2015

New Zealand shares rose, led by A2 Milk Co amid continued demand after its placement. Contact Energy, Fletcher Building and Property for Industry advanced. 77

The S&P/NZX 50 Index rose 51.04 points, or 0.9 percent, to 5689.830. Within the index, 41 stocks rose, four fell and five were unchanged. Turnover was $137 million.

A2, the milk marketing firm, climbed 5.1 percent, extending Friday's 8.3 percent gain, to 82 cents. Last week it raised $40 million in a placement to help fund planned growth in its infant formula business. The shares were halted at 72 cents, and were sold at 68 cents apiece in the capital raise.

"There were a few investors disappointed they couldn't participate in the placement or were scaled so there was some demand post the capital raising," said Grant Williamson, director at Hamilton Hindin Greene. "The projections and everything that's been detailed in the capital raise documents is all quite positive."

Dividend paying stocks rose as investors returned to equities as offshore market volatility cooled. The benchmark index declined some 3.5 percent in the three months ended September amid offshore uncertainty.

Contact climbed 1.4 percent to $4.93. Fletcher, the construction and building supplies firm, advanced 1.4 percent to $7.26. Property For Industry increased 1.4 percent to $1.50. Precinct Properties New Zealand rose 1.3 percent to $1.165. MightyRiverPower gained 1.2 percent to $2.45. Meridian Energy gained 1.2 percent to $2.135. Genesis Energy advanced 1.1 percent to $1.80.

"Our investors seem to have regained confidence, mainly because volatility has quietened down on the international markets," Williamson said. "Investors had been very much waiting on the sidelines for the things to quieten down and we've seen that now and it seems to be a bit of flow back into those high yielding stocks again."

Goodman Property Trust rose 0.4 percent to $1.18. Argosy Property gained 0.5 percent to $1.065. Kiwi Property Group climbed 1.2 percent to $1.295.

Ebos, the healthcare and animal care firm, climbed 1.2 percent to a fresh record close of $13.14.

Air New Zealand rose 0.9 percent to $2.695 after analysts lifted their target price for the stock after the airline forecast a boost in first-half earnings at last week’s annual meeting driven by increased demand, higher tourist numbers, and lower fuel costs.

New Zealand Refining, the Marsden Point oil refiner, was the worst performer on the benchmark index down 2.1 percent to $3.30.

Chorus, the network infrastructure builder, fell 0.9 percent to $2.705.

BusinessDesk.co.nz

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