MARKET CLOSE: NZ shares extend gain as Investore stags in latest listing

Tuesday 12th July 2016

New Zealand shares extended their run of new records, led by real estate owner Investore Property which debuted on the local market after being spun out of Stride Property.

The S&P/NZX 50 index rose 17.01 points, or 0.2 percent, to 7,079.46, a new record close. Within the index, 27 stocks gained, 17 fell, and seven were unchanged. Turnover was $148 million.

Investore jumped 8.1 percent to $1.61, leading the benchmark higher in its debut. The company raised $189 million at $1.49 a share in an initial public offering to help fund its acquisition of 14 Countdown supermarket sites. Stride demerged Investore, keeping a 19.9 percent stake and also issuing in the new company to its own shareholders. Investore will trade on the NZX 50 until at least September before the next portfolio update.

"The highlight has been Investore, which has gone on extremely well," said Matt Goodson, managing director at Salt Funds Management, which holds 7.4 percent of Investore. "The key thing that really seems to be attracting people is the very long WALT (weighted average lease term) of the portfolio."

Stride shares dropped 16 percent to $1.98, reflecting the Investore divestment, and was the biggest fall on the day.

Other stocks were buoyed by the rally in share markets across the region, with upbeat business confidence in Australia helping lift the SAP/ASX 200 index 0.5 percent in afternoon trading while the prospect of Japan's government further stimulating the economy drove the Nikkei 225 index up 2.6 percent.

The dual-listed Australian banks gained, with Australia & New Zealand Banking Group up 2.5 percent to $25.40 and Westpac Banking Corp rising 1.6 percent to $30.68.

Goodson said a stronger Australian dollar helped New Zealand companies with exposure across the Tasman, which increases the value of export income from Australia. The kiwi fell to 95.70 Australian cents at 5pm in Wellington from 96.19 cents yesterday.

Fletcher Building, which has operations in Australia, rose 1.4 percent to $8.89, while SkyCity Entertainment Group, which has casinos in Adelaide and Darwin, gained 1.8 percent to $4.65.

Port of Tauranga increased 0.3 percent to $19.65 after the Kotahi joint venture between Fonterra Cooperative Group and Silver Fern Farms said it was launching a new weekly service to Asian export markets through the Bay of Plenty hub, using a container ship with twice the capacity of usual vessels.

Kathmandu Holdings gained 3.1 percent to $1.69 after its biggest shareholder, Briscoe Group, said it would defend a $3.2 million claim for costs by the outdoor equipment chain. Kathmandu is seeking costs from the homeware and sports store retailer over last year's failed takeover bid. Briscoe shares rose 1.2 percent to $3.29.

Among stocks to fall, real estate investors Kiwi Property Group dropped 2 percent to $1.505, Goodman Property Trust was down 1.1 percent to $1.305, Property for Industry slipped 0.6 percent to $1.62, and Precinct Properties New Zealand decreased 0.4 percent to $1.245.

Sky Network Television fell 1 percent to $4.85 after a government paper on legislation regulating the telecommunications sector said the pay-TV operator's proposed merger with Vodafone New Zealand raised some questions about the safeguards in place to ensure 'net neutrality', meaning all internet traffic is treated equally.

Chorus rose 0.9 percent to $4.31 with the review confirming the government's plans to bring the telecommunications network operator's regulated pricing in line with electricity lines companies. Spark New Zealand, Chorus's biggest customer, was unchanged at $3.82.

Outside the benchmark index, Turners climbed 5 percent to $3.15 after the financial services firm said it will buy Auckland used car importer and dealer network Buy Right Cars for $15.3 million in cash and scrip.

T&G Global shares jumped 8 percent to $2.70 after Chinese fruit exporter Golden Wing Mau Agricultural Produce bought a 19.99 percent stake in the New Zealand fruit exporter yesterday at $2.95 a share.

Methven was unchanged at $1.28. The tapware maker today disclosed the founder of its Chinese manufacturing division sold his 5.85 percent stake for $5 million earlier this month at $1.17 a share, a discount to the $1.34 price they were trading at.

BusinessDesk.co.nz

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