MARKET CLOSE: NZ shares rise, led by a2 milk, ANZ; AirNZ, Vector fall

Wednesday 11th November 2015

New Zealand shares rose, led by a2 Milk and a bounce-back for Australia & New Zealand Banking Group, while Air New Zealand and Vector dropped.

The S&P/NZX 50 Index rose 10.73 points, or 0.2 percent, to 6013.54 . Within the index, 24 stocks fell, 19 stocks rose, and 7 were unchanged. Turnover was about $154 million.

A2 Milk rose 7.4 percent to 87 cents.The trans-Tasman dairy company rose for the second consecutive day on speculation of rising Chinese demand, and after Australian shoppers complained that baby formula was being bulk-bought and sold for a profit to China. A2 Milk said it has increased production as demand for its products skyrocketed over the past six months.

"They've talked about setting up a production facility in China to meet demand," said Nick Dravitzki, equity analyst at Devon Funds Management. "In Australia there's been a strong price movement with pretty much anyone associated with consumer goods into China, particularly agricultural consumer goods, and just recently baby formula. A2 may very well be benefitting from the same thing."

ANZ rose 4.5 percent to $28.43. The stock has fallen 18.9 percent in the past year, and today's upswing was "primarily driven by Australian movement," Dravitzski said. "ANZ has been a relative under-performer compared to the other big banks and is recovering a bit of that today."

Infratil rose 0.5 percent to $3.185. The investment company, managed by Wellington-based investment bank Morrison & Co, posted a 14 percent gain in first-half pretax earnings and affirmed its guidance for full-year growth of as much as 17 percent. Consolidated earnings before interest, tax, depreciation, amortisation, and fair value movements rose to $271 million in the six months ended Sept. 30, from $242.5 million a year earlier.

Air New Zealand fell 2.6 percent to $2.65, a one-month low, after Qantas Airways and American Airlines announced they had gained approval for a tie-up operating between Auckland and Los Angeles, competing with Air New Zealand in routes between New Zealand and North America.

In April the New Zealand carrier deepened its partnership with United Airlines for routes to the mainland US, allowing it to add Houston to a line-up of North American destinations including San Francisco, Los Angeles, Vancouver and Honolulu. Increased competition along the highly profitable flight routes was not unexpected news, Dravitzki said. "It has been expected for quite a while, so the stock market reaction is a little bit surprising to me."

Vector fell 1.9 percent to $3.12. Yesterday, the Auckland-based electricity and gas network operator sold its gas transmission and distribution assets outside Auckland in a $952.2 million sale to Australian investor First State Funds, an infrastructure investor with $7 billion of assets across Australia, New Zealand, and Europe. The sale will result in a gain for Vector of about $167 million and follows a strategic review of the company, which is increasingly focusing on growing in areas that are not subject to price regulation, such as telecommunications infrastructure.

Goodman Property Trust fell 0.4 percent to $1.205. New Zealand’s largest listed property investor posted a 20 percent drop in first-half profit, after the year-earlier period was boosted by a revaluation gain on its portfolio. Profit slipped to $48.4 million, or 3.8 cents per unit, in the six months ended Sept. 30, from $60.2 million, or 4.77 cents, a year earlier, the Auckland-based company said in a statement. Profit in the first half of last year was boosted by a $13.7 million revaluation gain on investment properties. Its first-half rental revenue slipped 4 percent $73.1 million.

Among smaller, companies, Blis Technologies was unchanged after naming Fonterra Cooperative Group manager Brian Watson as its new chief executive, replacing Barry Richardson, who will leave at the end of the current financial year after nine years in charge of the probiotics manufacturer. Blis has risen 47 percent over the last year.

Airwork Holdings rose 2.7 percent to $3.45. The listed aviation services firm, forecast a 30 percent gain in annual profit, after strong performances from its helicopter and fixed-wing businesses in the first quarter. The Auckland-based company expects profit to rise to at least $20 million, or 40 cents a share, in the 12 months ending June 30, 2016, chief executive Chris Hart told shareholders at their annual meeting in Auckland.

Sealegs Corporation, the amphibious vehicle maker, rose 17.7 percent to $0.10 after announcing a record operating profit for the six months to September of $368,490.

BusinessDesk.co.nz

Comments from our readers

No comments yet