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MARKET CLOSE: NZ shares rise, led by Xero, Infratil while NPT falls

Thursday 30th March 2017

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New Zealand shares advanced, led Xero and Spark New Zealand while NPT and Argosy Property dropped.
The S&P/NZX 50 Index gained 35.55 points, or 0.5 percent, to 7,169.12. Within the index, 24 stocks rose, 18 fell and eight were unchanged. Turnover was $166 million.
The local index has risen for three sessions in a row, bolstered by strong leads from international markets. Xero led the index, up 3 percent to $19.29 after saying it reached a milestone of signing more than 1 million customers, while Spark New Zealand gained 2.5 percent to $3.45 and SkyCity Entertainment Group rose 2 percent to $4.09.
Infratil rose 1.9 percent to $2.905. Yesterday, the Wellington-based investment firm said it anticipates flat earnings in the 2018 financial year but is confident it can keep boosting returns to shareholders and is still on the prowl for new acquisitions. 
"We had a healthy bounce after there was a bit of disappointment from the market yesterday. We had probably perceived lower guidance than people were expecting," said David Price, a broker at Forsyth Barr. "It was disappointing, but the issue is the stock is trading at a decent discount, and when you look across the market there's a lot of stocks trading at a premium to our valuation, so I suppose that's what's given it support."
Fletcher Building gained 0.5 percent to $8.29. The shares have dropped 22 percent so far this year after its first-half earnings disappointed the market in February, with a cut to its full-year guidance last week accelerating that decline, but began recovering yesterday after hitting an 11-month low on Tuesday.
"We've carried on today with decent volume in Fletcher Building, bouncing off what was a pretty aggressive sell-off," Price said. "There's no new news, but it seems to have settled at a level around that $7.90 and it's bounced since then."
Air New Zealand rose 1.6 percent to $2.495. The shares have gained 8.7 percent since Tuesday, when the national carrier reported a 2 percent rise in revenue passenger kilometres compared to February 2016, with capacity up 5.3 percent, in its monthly operating statistics for February. Short-haul passenger numbers increased 2.2 percent, while long haul numbers rose 3.1 percent.
"It's another strong performance against what I would view as a fairly weak set of numbers," Price said. "The last numbers we had from them were particularly weak so that's a surprise on the upside."
Argosy Property was the worst performer, down 1.5 percent to 98 cents, while Metro Performance Glass fell 1.5 percent to $1.32 and Stride Property declined 1.2 percent to $1.72.
Outside the benchmark index, NPT dropped 1.7 percent to 59 cents. It will pitch its favoured tie-up with Kiwi Property Group at a special meeting next month, where shareholders will vote on whether to back the deal or accept a rival proposal from Augusta Capital to dump the board. 
NPT would fund the acquisition of Kiwi Property assets by borrowing $87 million and by making a pro-rata entitlement offer of new shares to eligible NPT shareholders to raise approximately $94 million. In materials explaining the Kiwi Property offer, the board based its forecasts on a one-for-one rights issue at 58 cents per share. Substantial shareholder Salt Funds Management has urged shareholders to vote against the offer, saying it "represents an unacceptable transfer of value from NPT shareholders to KPG".
Hallenstein Glasson Holdings gained 3.6 percent to $3.50. It posted a 35 percent increase in first-half profit, meeting its forecast, and said early winter sales were "encouraging".
Cavalier jumped 18.2 percent to 65 cents, although it has dropped 30 percent so far this year.

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