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MARKET CLOSE: NZ shares get further lift from positive offshore markets

Thursday 17th January 2019

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New Zealand shares rose as sentiment continued to benefit from positive offshore leads. Genesis Energy, A2 Milk and Synlait Milk gained. 

The S&P/NZX 50 index rose 50.37 points, or 0.6 percent, to 9,077.81. Within the index, 26 stocks rose, nine were unchanged and 15 fell. Turnover was $118.7 million.

Overnight, strong earnings from Bank of America Corp and Goldman Sachs Group boosted investor sentiment. The Dow Jones Industrial Average added 0.6 percent while the S&P 500 and the Nasdaq Composite both added 0.2 percent and the "stronger offshore leads globally are providing us with some direction," said Peter McIntyre, investment adviser at Craigs Investment Partners.

He expects the market to remain focused offshore and on US earnings in the short term, but said the focus will then shift to the domestic reporting season in February.  

Spark New Zealand was once again the most heavily traded stock with some 6.4 million shares turning over –  around 3 million more than the daily average for the past three months. It was unchanged at $4.05. It is widely held by international investors "so it has good liquidity, which is the attraction for investors, plus its yield," McIntyre said. 

Chorus fell 0.4 percent to $4.73. Growth in the uptake of ultra-fast broadband on the networks Chorus is installing slowed in the December quarter as more of the roll-out was completed, it said earlier. 

Trade Me was the second most heavily traded stock, with 2 million shares changing hands. It was unchanged at $6.34. In December the company agreed to a scheme implementation agreement under which UK-based Apax Partners will acquire all its shares at $6.45 apiece, subject to shareholder and court approval and no better offers emerging. A vote is expected in April. McIntyre said that some investors may now be opting to move out of Trade Me and into other investments given there is little difference between the current price and what they will obtain. 

Genesis Energy was the biggest gainer on the market, adding 3 percent to $2.71. It was followed by A2 Milk, which was up 2.9 percent at $12.45. Gentrack lifted 2.6 percent to $5.23 while Synlait added 2.5 percent to $9.90. A2 and Synlait have benefited from signs of improving Chinese demand. Yesterday,  Fonterra interim chief executive Miles Hurrell told NZME’s The Country radio service that China is still very active in the market and there was “good support from China” in the latest GlobalDairyTrade auction.

Units in the Fonterra Shareholders' Fund fell 0.9 percent to $4.68

The biggest loser on the day was Stride Property, which shed 1.1 percent to $1.88. Trading was light. 

New Zealand Refining was unchanged at $2.39. Record throughput in the final six months of 2018 helped it recoup some of the losses from its extended shutdown earlier in the year.

Kathmandu added 2.1 percent to $2.45, continuing a recovery after losing ground on a tepid Christmas sales period.  The company announced it has hired US clothing executive Amy Beck to run its North American business. Last April it paid US$60 million for Montana-based Oboz Footwear to diversify its product range and expand its geographic spread.

Infratil added 0.1 percent to $3.70. Earlier the company said Alison Quinn has resigned as the CEO of RetireAustralia, with effect from March 31. She has held the position since early 2016.  

Fletcher Building rose 0.6 percent to $4.97. Data from the Real Estate Institute of New Zealand showed the final month of last year saw the lowest number of residential properties sold in a December month in seven years. Auckland continues to be particularly muted.


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