MARKET CLOSE: NZX 50 rises to record, led by Auckland Airport, Fletcher

Monday 5th January 2015

The NZX 50 climbed to a record in the market's first day of trading for 2015, led by Auckland International Airport and Fletcher Building as investors looked for cheaper stocks in a fully priced market. Chorus, the benchmark's top performer last year, fell.

The NZX 50 Index advanced 34.318 points, or 0.6 percent, to 5602.601. Within the index, 27 stocks rose, 10 fell and 13 were unchanged. Turnover was $68 million, compared to a daily average $162 million in November.

The benchmark index climbed 18 percent in 2014, as investors were lured to companies which pay a reliable dividend in an environment of low interest rates. On the first day of trading in New Zealand bargain hunters entered the market looking for cheaper equities.

"On a price-earnings ratio the market does look a little bit expensive, but that is only if companies are not going to produce positive earnings growth in 2015," said Grant Williamson, director at Hamilton Hindin Greene. "Investors will be cautious, but there are still plenty of opportunities in the marketplace."

Fletcher, the building supplies and construction company which declined 2.5 percent in 2014, gained 2.1 percent to $8.47. Auckland International Airport, the country's busiest gateway, rose 3.3 percent to $4.37, leading the benchmark index higher.

"The mix of Fletcher Building and Auckland Airport has boosted the index," Williamson said. "Both those stocks were sold off late in December so they're recovering quite nicely. This time of year investors take a look at their portfolios and look to see what the brokers are picking for 2015 and make some adjustments. Fletcher Building and Auckland Airport are two that are some brokers are picking for 2015."

Chorus, the telecommunication network operator which gained 85 percent last year, fell 0.8 percent to $2.64. Spark New Zealand, the country's largest telecommunications provider which advanced 35 percent in 2014, slipped 1 percent to $3.10.

Fisher and Paykel Healthcare Group declined 1.4 percent to $6.16. Sky Network Television fell 0.8 percent to $5.99. SkyCity Entertainment Group slipped 0.8 percent to $3.85.

Retailers were mixed after flagging the importance of Christmas sales to boost revenue and lift earnings. Kathmandu Holdings, the outdoor goods retailer, declined 2.3 percent to $2.11. Trade Me Group, the online auction house, fell 1.1 percent to $3.61. Restaurant Brands, New Zealand's largest fast food outlet, was unchanged at $3.67, as was Warehouse Group, the largest listed retailer, at $3.12. Outside the benchmark index, Pumpkin Patch, the unprofitable childrenswear clothing company which said it may breach banking covenants if seasonal sales don't deliver, jumped 23 percent to 27 cents.

"The jury is still out on the retailers and how they did over the Christmas period. Certainly some of the data that came out, electronic cards and such, did look very positive," Williamson said. "Investors will be waiting to see how the individual retailers report sales."

Outside the benchmark index, Wynyard Group climbed 6.7 percent to $2.08 after the security software firm signed a $3.2 million contract with an unidentified national security bureau, which it says reduces the risk of the firm missing its 2014 revenue target.

BusinessDesk.co.nz

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