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MARKET CLOSE: NZ shares rise, led by Vista, NZX at 18-month high; FPH drops on Trump tariff threat

Friday 27th January 2017

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 New Zealand shares rose, led by Vista Group International and NZX at an eighteen-month high, while Fisher & Paykel Healthcare dropped after US President Donald Trump said he planned to impose a Mexican tariff.

The S&P/NZX 50 Index gained 20.93 points, or 0.3 percent, to 7,134.26. Within the index, 31 stocks rose, 12 fell and seven were unchanged. Turnover was $82.7 million.

"It's still pretty low volumes, it'll start to pick up next week with earnings season coming in full force and we'll have sales updates from a few of the retailers coming through," said Grant Davies, investment adviser at Hamilton Hindin Greene. 

Vista led the index, up 3.1 percent to $5.60, while Restaurant Brands New Zealand gained 2.9 percent to $5.63.

NZX advanced 2.8 percent to $1.11, the highest it's traded since June 2015. Davies said the stock had a strong week, up 4.7 percent, and had benefited from a buoyant market this week. The NZX 50 Index has gained 0.7 percent over the course of the week.

F&P Healthcare was the worst performer, down 3.1 percent to $8.87. The recently inaugurated Trump said today he could pay for the wall he intends to build between the US and Mexico - one of his campaign promises - by introducing a 20 percent tariff on Mexico's imports. Mexico's president had cancelled a planned meeting between the two due to Trump's insistence Mexico should pay for the wall.

"That's another Trump sell-off. With their Mexico production facility, the tariff situation Trump's talking about could have a bit of an impact, though they're really just back to where they were at the start of this week - no reason to panic," Davies said. 

Contact Energy dropped 3 percent to $4.85, Trustpower fell 1.3 percent to $4.70, and Stride Property declined 1.1 percent to $1.77.

Comvita rose 0.7 percent to $7.25 today. The shares plunged 17 percent on Monday after the manuka honey products producer warned annual earnings would tumble by about two-thirds to between $5 million and $7 million due to bad weather limiting its honey harvest and slow sales via China's informal trading channels. They were trading at $7.83 prior to the earnings announcement.

"It was a bit of a yo-yo week, we've seen a few analyst downgrades this week - most of the analysts are still fairly bullish around $9 to $10 per share, perhaps some are seeing it as an opportunity to get into a long-term growth story," Davies said. "It was maybe an overreaction Monday and clearly a recovery into the end of the week."

Outside the benchmark index, NZME dropped 1.5 percent to 68 cents. The company, along with Fairfax New Zealand, talked up their credentials as a locally-listed company that pays tax in their latest efforts to win merger approval from the Commerce Commission, which fears it will be too dominant. 

The news organisations said a merger would let them build a "real opportunity" to compete with the likes of online ad giants Google and Facebook.

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