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MARKET CLOSE: NZ shares rise slightly to record high, Z Energy up while SkyCity falls

Monday 7th March 2016

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New Zealand shares rose slightly to close at another all-time high as the market took a breather post earnings season. Z Energy gained while SkyCity Entertainment Group fell.

The S&P/NZX 50 Index edged up 0.8 points, or 0.01 percent, to 6,418.93. Within the index, 22 stocks gained, 20 fell and eight were unchanged. Turnover was $123.7 million.

Z Energy led the index, advancing 3.1 percent to $6.57, though the stock only got back to where it was a week ago. The stock has been up and down over the past month, probably reflecting a bit of illiquidity in the market, said Craig Stent, a portfolio manager and analyst at Harbour Asset Management. 

Stocks across Asia lifted slightly on the afternoon's trading, with Australia's S&P/ASX 200 climbing 1.1 percent with a rebound in commodities. The local bourse was more sedate, following the conclusion of February's reporting season, Stent said.

"People are digesting results from the end of reporting season," he said. "Investment communities are catching up with management, there are broker conferences happening - there's a bit of a pause in terms of what people are thinking."

Vital Healthcare Property Trust rose 2.6 percent to $2.01, while Tower gained 2.5 percent to $1.63 and Port of Tauranga advanced 1.9 percent to $18.90.

Restaurant Brands grew 1.8 percent to $4.55, a record closing price. Last Friday, the fast food operator unveiled plans to expand in Australia, buying the biggest KFC fried chicken franchise in New South Wales for A$82.4 million in cash and scrip and gaining a business with annual sales of A$100 million and pretax earnings of A$15 million.

Warehouse Group climbed 1.5 percent to $2.75. The retailer is due to announce its earnings on Friday, and Stent said its latest quarterly update had been positive over the Christmas period. 

SkyCity dropped furthest, down 2.4 percent to $4.43, and has gained 2.5 percent so far this year. 

Meridian Energy shed 1.6 percent to $2.54. The stock was included in foreign indices announced last week, Stent said, which pushed the price up, with the stock gaining about 12 percent this year before today's fall.

"There's a lot of second-guessing by investors about what's going to go in, and that was probably pushed up prior to announcement," Stent said. "Then, once the announcement happens, it sort of runs out of puff."

Diligent Corp fell 1.3 percent to $7.02. Shareholders will vote on Insight Venture Capital's US$624 million takeover bid next month. The deal has the backing of the company's board and a clean bill of health in Simmons Corporate Finance's independent report valuing the transaction. Insight has offered US$4.90 a share via a merger, which requires a simple majority of shareholder support, at least 60 percent of those holding preference shares, and regulatory approval.

Auckland International Airport dropped 1 percent to $6.65 and Fisher & Paykel Healthcare fell 1 percent to $9.01. 

Infratil shed 0.9 percent to $3.17. Iwi-owned Go Bus said today it had won four South Auckland public transport contracts, after Infratil's NZ Bus unit failed in its bid to retain the contracts. Infratil's bus division generated earnings of $22.7 million in the six months ended Sept. 30 last year, on revenue of almost $119 million, up slightly from a year earlier.

Outside the benchmark,  Pacific Edge declined 1.1 percent to 47 cents. The bladder cancer test maker's supply deal with the US Veterans Administration is positive news, but it's still unclear how much benefit the firm will get from the contract, brokerage First NZ Capital said. The brokerage has an 'outperform' rating on Pacific Edge and a target price of 60 cents per share.

BusinessDesk.co.nz



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