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MARKET CLOSE: NZ shares rise, Comvita and Fletcher gain while Tourism Holdings, NZX fall

Monday 6th August 2018

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New Zealand shares rose in light trading, led higher by Comvita and Fletcher Building with PGG Wrightson jumping to a two-month high.

The S&P/NZX50 Index gained 38.61 points, or 0.4 percent, to 8,903.13. Within the index, 25 stocks rose, 13 were unchanged and 12 fell. Turnover was $65.5 million.

"With part of the Australian market off with a New South Wales holiday, it has seen a few participants out of the market today. We had a strong lead off the US and European markets, the Asian markets seem to have shrugged off further concerns about tariff increases and Australia and New Zealand are up," said Shane Solly, director, portfolio manager & research analyst at Harbour Asset Management.

"We are in a hiatus pre-results, there's a lot of people thinking about where there's risk in the results season and that is slowing people up from making their decisions," Solly said. "The market has had a very strong run, so we need a good solid results season to keep it kicking along."

Comvita was the best performer, up 1.8 percent to $5.70, with Fletcher Building gaining 1.6 percent to $7.04. A2 Milk Co rose 1.3 percent to $10.56, which Solly said was due to a positive research note on the stock released this morning.

Air New Zealand rose 1.2 percent to $3.34 and Chorus gained 1.2 percent to $4.33.

Tourism Holdings was the worst performer, down 1.3 percent to $6.03.

NZX dropped 0.9 percent to $1.08. The stock market operator said trading activity was busier in July from a year earlier, although with smaller values changing hands. Total trades jumped 70 percent to 258,063 in July, with average daily trades at 11,730, though total value traded was down 24 percent to $2.62 billion, or a daily average of $119 million. 

Outside the benchmark index, PGG Wrightson rose 7.8 percent to 69 cents, the highest it has closed since June 13th. The country's largest rural services business said it had agreed to sell its seed and grain business to Danish cooperative DLF Seeds for $421 million in cash and $18 of debt repayment, and signalled it may return up to $292 million to its shareholders.

The seed and grain unit is the largest of PGG Wrightson's three core businesses, generating more than half of its operating earnings in the last financial year from across New Zealand, Australia and South America. The sale is above the $285 million book value of the seeds business and follows several expressions of interest received from international parties.

"It's a solid result on the sale of the seeds business, priced better than the market was expecting," Solly said.


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