MARKET CLOSE: NZ shares gain on global wave, Fletcher Building, Restaurant Brands rise

Friday 2nd June 2017

New Zealand shares rose, led by Fletcher Building and Restaurant Brands, as global equity markets rallied.

The S&P/NZX 50 Index gained 49.07 points, or 0.7 percent, to 7,499.97. Within the index, 35 stocks rose, nine fell and six were unchanged. Turnover was $167 million.

The local index followed global bourses higher, after US markets finished stronger overnight after upbeat manufacturing and employment data. This afternoon, Japan's Nikkei 225 rose 1.9 percent, Australia's S&P/ASX 200 gained 0.7 percent, and Hong Kong's Hang Seng advanced 0.5 percent.

Fletcher Building was the best performer on the local index, up 3.5 percent to $7.73. The shares have been weak for some time, dropping nearly a dollar over the course of May to $7.56, said Craig Stent, executive director and head of equities at Harbour Asset Management.

"There have been expectations they might have further downgrades to earnings, though those could have been priced in now," Stent said. "It's possible people have become a little over-bearish in that regard."

Restaurant Brands gained 2 percent to $6.07, a new record. The shares reached an all-time high yesterday when the fast-food operator announced it had boosted first-quarter sales by 67 percent to $161.2 million after expanding in Australia, Hawaii, Guam and Saipan. On a same-store basis, sales rose 7.2 percent.

"The key driver of that is probably KFC sales, there's a bit of expectation that they will acquire further stores in Australia," Stent said. "It's likely those might come from Yum Brands as the master franchisor, which has got intentions to get out of owning their own stores."

Air New Zealand was the worst performer, down 4 percent to $2.90. Yesterday, the shares hit a 16-year high of $3.02 after the airline lifted its full-year guidance to exceed $525 million, having benefited from lower jet fuel prices and improving revenue. Today, First NZ Capital lifted its 12-month target price on Air New Zealand to $2.50 from $2.10 but lowered its rating to 'underperform' from 'neutral' based on its updated valuation and current share price.

Sky Network Television dropped 1.4 percent to $3.63, while Spark New Zealand declined 1.3 percent to $3.78.

NZX was unchanged at $1.09. The stock exchange operator's board told shareholders it doesn't support the election of Tony Falkenstein as one of its directors at its annual meeting later this month, saying it doesn't believe he would add sufficient additional skills, depth or experience to the current board.

Falkenstein, who founded the water cooler business Just Water International, has nominated himself to be put forward as a director. He has publically tussled with the NZX in the past, speaking out against the exchange's new NXT market which aimed to target high-growth companies, and saying the business had become too bureaucratic and didn't do enough to encourage new listings.

(BusinessDesk)

Comments from our readers

No comments yet