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MARKET CLOSE: NZ shares rise led by Auckland Airport, A2; Gentrack falls

Wednesday 30th May 2018

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New Zealand shares rose, led by Auckland International Airport, Spark and Fisher & Paykel Healthcare and as buyers returned to A2 Milk. Gentrack Group fell as earnings growth disappointed some bullish investors.

The S&P/NZX 50 Index rose 12 points, or 0.1 percent, to 8,647.86. Within the index, 12 stocks rose, 30 fell and eight were unchanged. Turnover was $193 million, of which A2 Milk made up about $50 million and Spark contributed $30 million.

The local market shook off early selling pressures from overseas which included a sell-off on Wall Street overnight, partly on uncertainty over Italy's government and US-China trade friction. Spark rose 1.8 percent to $3.705, a seven-month high, having gained since the company said last week it was bringing forward restructuring costs and accelerating its 'Quantum Programme' to transform the company into the operator with the lowest costs.

"Our market has done extremely well today, given the pressure from overseas," said Grant Williamson, a director at Hamilton Hindin Greene. With Spark, "it has been a continuation since its announcement."

A2 rose 3.1 percent to $10.88, leading the market higher, having led the market lower yesterday. The stock had dropped 16 percent in the past month and there was "pretty good buying today once the Aussie market opened," Williamson said.

F&P Healthcare rose 0.8 percent to $13.10, having fallen yesterday. On Monday the company posted a 12 percent gain in 2018 annual profit to the top end of its forecast range and said it expects record earnings in the coming year as it benefits from growing global demand.

Among other blue-chip companies, Auckland International Airport climbed 1.5 percent to $6.65, leading the market higher.

Gentrack dropped 6.7 percent to $6.95 after the utilities software developer posted an 80 percent gain in first-half earnings on returns from new projects and acquisitions made last year and said it had a strong pipeline of opportunities.

"Gentrack is one of the better performing high-tech stocks  but maybe is not growing as quickly as  what the market wanted", given the stock's strength in the past year, Williamson said

Australian & New Zealand Banking Group fell 2.7 percent to $29.40 on the NZX today. The lender announced the sale by its New Zealand unit of the OnePath Life NZ business for $700 million to NYSE-listed Cigna Corp. But Williamson said the Australian banks fell in line with financial stocks in other markets. Westpac Banking Corp fell 2.4 percent to $30.15 on the NZX today.

Stride Property rose 0.6 percent to $1.78 after the group posted flat annual earnings as it beds in a new strategy and reshaped portfolio where it clips the ticket as a property manager as well as directly owning real estate. 

Outside of the benchmark index, Plexure shares soared 15 percent to 22 cents after the mobile voucher firm released figures that showed it is starting to generate positive cash flow after slashing costs and building sales momentum. 

Tilt Renewables last traded at $2.08. The company announced it had entered into an agreement with Citigroup Global Markets and Forsyth Barr Group to underwrite an A$300 million equity raising should it be successful in its bid for a 15-year power contract with the Victorian state government in Australia.

Green Cross Health was unchanged at $1.67 after the medical services provider reported a 15 percent fall in annual profit as it made up the unfunded shortfall left in the government's $2 billion pay equity package for aged and residential care workers, overshadowing underlying earnings growth. 

"That stock has been on the weak side" amid concerns about the impact on the sector of wage negotiations with district health boards and reports a large Australian pharmaceutical warehouse is looking to expand in New Zealand.

SeaDragon was unchanged at 0.5 cent after the fish oil refiner said its full-year normalised ebitda loss was $4.5 million, narrower than the year-earlier loss of  $4.7 million but not as much of an improvement as it had flagged.


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