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MARKET CLOSE: NZ shares mixed as blue-chips NZ Refining, Fletcher, Spark buoy broader market

Monday 16th October 2017

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New Zealand shares edged higher as blue-chip stocks including New Zealand Refining, Fletcher Building, and Spark New Zealand helped buoy the market, offsetting declines from half the benchmark index. 

The S&P/NZX 50 index increased 1.41 points, or 0.02 percent, to 8090.73. Within the index 18 stocks gained, 25 declined, and seven were unchanged. Turnover was $155 million. 

Long-standing companies led the index higher, with NZ Refining gaining 2 percent to $2.55, Fletcher increasing 1.7 percent to $7.83 and Spark up 1.3 percent to $3.65. 

The NZX50 has gained for 10 sessions and has been buoyed by export-focused, growth-orientated companies including a2 Milk Co, Synlait Milk, Xero and Fisher & Paykel Healthcare. A2 and Synlait fell today, down 0.9 percent to $7.70 and 0.5 percent to $7.44 respectively, while Xero gained 1 percent to $35.45 and F&P Healthcare advanced 0.9 percent to $12.93. 

Those growth stocks "have very high multiples and very interesting longer-term stories," said Matt Goodson, managing director at Salt Funds Management in Auckland. "Over the last month or two, it's been very much led by a very small group of companies." 

Port of Tauranga posted the biggest decline on the benchmark index, falling 2 percent to $4.39. The port operator is among companies hosting annual meetings this week, alongside Ebos Group, which slipped 0.2 percent to $17.40, Tourism Holdings, which gained 0.4 percent to $4.72, Comvita, which decreased 0.1 percent to $7.45, and SkyCity Entertainment Group which gained 0.8 percent to $3.74.

Sky Network Television, which also hosts its AGM this week, rose 0.7 percent to $2.89. The pay-TV operator's content will be bundled with Vodafone New Zealand's fibre service. 

Goodson said there were no particular expectations for annual meetings, although investors will be watching for any signs that the wet winter and election uncertainty feeds into the commentary. 

Metro Performance Glass was unchanged at $1.02 after the glass products maker announced plans for a strategic review as shareholders agitate for management to lift their game. 

"It's quite a far-ranging strategic review - there was no further explicit downgrade contained in that announcement, but certainly the stock has been very weak this year," Goodson said."Debt levels aren't low so they wouldn't want to have any further downgrades."

Units in the Fonterra Shareholders Fund rose 0.5 percent to $6.21 after Fonterra Cooperative Group downgraded its forecast milk collection in New Zealand due to the wet winter. Its Australian collection continued to track ahead of the 2017 season having picked up farmers unhappy with Murray Goulburn. 

Outside the benchmark index, NZME fell 5.5 percent, or 5 cents, after the media group shed rights to a 3.5 cents per share dividend. NZME and rival Fairfax New Zealand today kicked off their judicial review of the Commerce Commission's rejection of a planned merger. 

Scott Technology climbed 6 percent to $3.55, having touched an intraday record $3.81. The automation and robotics firm reported a 26 percent gain in annual profit last week. 

Kingfish rose 0.8 percent to $1.28 after the Fisher Funds managed investment vehicle said it was finally investing in Xero after eschewing the software developer in the past over its lack of profitability. Fisher Funds predicts Xero's Australia and New Zealand units were profitable in 2017 and that the group is on track to deliver increased earnings. 

T&G Global increased 0.6 percent to $3.37 after the fruit marketing firm said it planned to sell its food processing unit, probably at a loss. 



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