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MARKET CLOSE: NZ shares rise; Diligent leads on BoardLink purchase, Spark, MRP, Freightways gain

Tuesday 20th October 2015

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New Zealand shares rose, led by Diligent Corp after it announced an acquisition. MightyRiverPower, Freightways, Spark New Zealand gained on upbeat sentiment for New Zealand equities and the wider economy. 

The S&P/NZX 50 Index rose 60.66 points, or 1 percent, to 5895.49. Within the index, 37 stocks rose, ten fell and three were unchanged. Turnover was $189 million. 

Diligent, the governance software developer, climbed 4 percent to an eight-month high of $5.93. The company has acquired BoardLink from financial services firm Thomson Reuters for US$10 million in cash to widen its portfolio of products aimed at company directors.

"It is a very good bolt-on acquisition and it adds to their business and more importantly their customer base," said Mark Lister, head of private wealth research at Craigs Investment Partners. "That's been taken well."

The benchmark rose in broad-based buying, as investors sought dividend paying equities in the face of interest rates staying low for longer. Meanwhile, increasingly upbeat sentiment over the local economy, where dairy prices, the country's largest export commodity, are improving added to demand for kiwi stocks.

"Rates certainly aren't going anywhere - they're probably not going down at the next Reserve Bank meeting but that is a matter of time, and they're certainly not going up," Lister said. "The economic mood in New Zealand is reasonably upbeat at the moment - dairy prices have rebounded and some of the concern about what the dairy sector might face has disappeared a little bit. Some of those global uncertainties subside for the time being."

Freightways, the logistics and courier firm, gained 3.3 percent to $5.65. MRP, the utility company, rose 2.5 percent to $2.65. Spark, the telecommunications firm, advanced 2.8 percent to $3.26. Meridian Energy gained 1.8 percent to $2.21. Ryman Healthcare, the retirement village operator, gained 2.6 percent to $7.80. 

Genesis Energy advanced 1.1 percent to $1.86 after the energy generator and retailer said it has seen growth in electricity sales in the first three months of the new financial year after New Zealand's biggest electricity and gas retailer halted a slide in customers in the face of "aggressive" competition. The company's total customers rose 0.1 percent to 652,523 in the three months ended Sept. 30, from a year earlier.

Goodman Property Trust was unchanged at $1.20. The property investor has completed its refinancing for the year with a new $157 million debt facility for Wynyard Precinct Holdings, its joint venture with Singapore government-owned GIC.

Australia & New Zealand Banking Group was the worst performer on the benchmark index, falling 1.6 percent to $30.30, while Westpac Banking Corp declined 1.5 percent to $32.95.

Fletcher Building, the construction and building supplies firm, fell 1.2 percent to $7.16. 

"You look at it from a top down economic point of view and you think there should be a few things that have gone their way in terms of the Christchurch rebuild and the housing market but it just never seems to deliver," Lister said. "They just don't seem to be able to do what investors expect and benefit from the bigger themes." 

Outside the NZ Alternative index, GeoOp, the workforce management app developer, was unchanged at 40 cents after it said it increased revenue and added customers in the first quarter of its financial year as it strives to turn a profit. The Auckland-based company had 20,890 licensed users at Sept. 30, up from 19,009 at June 30 and 13,370 a year earlier, it said in a statement. 

 

BusinessDesk.co.nz



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