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MARKET CLOSE: NZ shares resume march higher as A2 hits record; Gentrack sinks

Friday 26th July 2019

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(July 25, 5:47 PM) New Zealand shares bounced back from yesterday's dip, as A2 Milk Co closed at a record with investors still upbeat about the milk marketing firm's outlook. Gentrack dropped to a six-week low after cutting its earnings guidance. 

The S&P/NZX 50 Index increased 85.74 points, or 0.8 percent, to a record 10,898.28. Within the index, 30 stocks rose, 15 fell, and five were unchanged. Turnover was $107.4 million. 

A2 rose 2.7 percent to a record close of $17.48 on 502,000 shares, less than its 90-day average of 723,000 shares. The NZX's biggest listed company hit an intraday high $17.57 this week having enjoyed a month of upbeat broker reports, including Morgans lifting its target price to A$15.35 from A$13.66 last Friday. Lyttelton Port cargo data yesterday supported that view. A2 was up 2.8 percent at A$16.79 in late trading on the ASX. 

"A notable feature today is the strength of A2. There was no real new news, but there was some decent shipment data out from Port of Lyttelton yesterday," said Matt Goodson, managing director at Salt Funds Management. 

Synlait Milk, which supplies A2, increased 0.7 percent to $9.69. 

Other exporters also gained, with Pushpay Holdings up 2.1 percent at $3.47, Fisher & Paykel Healthcare rising 2 percent to $16.48, Vista Group International up by 0.7 percent to $6.05 and Mainfreight up 0.6 percent to $42.40. 

New Zealand Refining led the market higher, up 2.8 percent at $2.17 on a volume of 98,000 shares, less than half its 210,000 average. 

Genesis Energy advanced 2 percent to $3.51 after reporting a 1.6 percent decline in fourth-quarter customer numbers, a 2.7 percent increase in total generation and a 35 percent jump in its average wholesale electricity price. Goodson said the numbers were in line with expectations. 

Gentrack slumped 13 percent to $5.16, after downgrading its earnings guidance, blaming delays in customer contracts and potential bad debts in the UK. About 142,000 shares changed hands, more than its 111,000 average. 

Goodson said the company had already downgraded its earnings outlook. Today's news showed Gentrack was still dependent on large contracts, despite its efforts to make more software-as-a-service sales. 

Oceania Healthcare fell 3.7 percent to $1.03 on a volume of 1.1 million shares, more than its 682,000 average. The aged-care operator reported a 1.8 percent decline in underlying annual earnings as sector-wide wage hikes and new facilities increased its costs. 

Ryman Healthcare rose 0.8 percent to $13.09. The country's biggest listed retirement village operator held its annual meeting in Orewa today, where shareholders were told the first-quarter trading was satisfactory and that new development will largely fall in the second half of the March financial year. 

Spark New Zealand was the most traded stock with a volume of 2.6 million shares, down on its 3.4 million average. It increased by 0.9 percent to $3.92. Kiwi Property Group rose 0.9 percent to $1.64 on a volume of 2.1 million shares, more than its 1.5 million average. 

Auckland International Airport slipped 0.4 percent to $9.60 on 1.2 million shares after unveiling plans to spend about $100 million on new roads to improve public transport options for travellers and workers. 

Of other companies trading on volumes of more than a million shares, SkyCity Entertainment Group rose 1.5 percent to $3.98, Precinct Properties New Zealand increased 0.9 percent to $1.785, Infratil fell 0.4 percent to $4.69, Argosy Property advanced 0.4 percent to $1.40, and Fletcher Building was unchanged at $4.91. 

Heartland Bank's 2024 bonds paying annual interest of 3.55 percent were the most traded debt security with a volume of 582,000. The notes closed at a yield of 3.02 percent, up 2 basis points. Heartland Group Holdings' shares fell 0.6 percent to $1.69. 


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