MARKET CLOSE: NZ shares rise for 5th day, led by Fisher & Paykel, Trustpower, NZX

Thursday 22nd December 2016

New Zealand shares rose with positive sentiment leading into the Christmas holiday period, which often sees a seasonal rally in light trading, led by Fisher & Paykel Healthcare, Trustpower and NZX. Air New Zealand fell.

The S&P/NZX 50 Index gained 49.12 points, or 0.7 percent, to 6,851.88. Within the index, 32 stocks rose, 11 fell and seven were unchanged. Turnover was $137 million.

"This will be our fifth day firmer - certainly the short-term trend has changed somewhat, the buyers are back in control. We do quite often see a Christmas, New Year rally, on pretty lightish volumes," said Grant Williamson, director at Hamilton Hindin Greene. "With the kiwi dollar weakening somewhat it's got a few stocks moving higher as well."

Fisher & Paykel Healthcare led the index, up 4 percent to $8.63, with the breathing mask and respirator maker typically a beneficiary of a weaker currency because it derives the bulk of its income from exports. Trustpower gained 2.2 percent to $4.60 and NZX rose 2 percent to $1.03.

Air New Zealand was the worst performer, down 2.1 percent to $2.10. Heartland Bank dropped 1.3 percent to $1.47 and Mainfreight declined 1 percent to $20.64.

A2 Milk Co fell 0.9 percent to $2.14, trimming some of the 5.9 percent gain yesterday after it reassured investors about its performance. The milk marketer's shares have been dragged lower after ASX-listed rival Bellamy's went into a trading halt last Monday. That halt was yesterday extended until Jan. 13, pending negotiations with key suppliers and manufacturers that could affect earnings.

"The market is still waiting to see what the Australian company has to say for itself - it's been dragging on for quite some time, the announcement from A2 was pretty positive yesterday," Williamson said. "It does seem a terribly long time to be in a trading halt for a company that size. A2 was firmer first thing but the selling pressure has knocked it back."

Z Energy dropped 0.4 percent to $7. Caltex Australia has agreed to buy local minnow Gull New Zealand for $340 million, giving the ASX-listed fuels company a foothold on this side of the Tasman with about 5 percent of the market. The deal is subject to Overseas Investment Office approval.

"Obviously with the announcement could increase competition so that could be one reason we've seen a bit of weakness in recent times," Williamson said.

Outside the benchmark index, Hellaby Holdings rose 2.4 percent to $3.49. ASX-listed auto-parts company Bapcor says it's confident it will get acceptances for more than 50 percent of Hellaby under its takeover offer and may waive its 90 percent ownership condition after the Overseas Investment Office approved Bapcor's $3.60-per-share offer.

"The Hellaby directors have been trying to look after shareholder interests - gone are the days where directors of New Zealand companies would just throw their hands up and say yes, you can take us over," Williamson said. "They've held up very well, and obviously the bid price has been increased; I just hope they don't try to push it too far."

Augusta Capital rose 1.1 percent to 96 cents. It said its Augusta Funds Management unit has inked a deal to purchase a development in Newmarket, Auckland, for $143 million. The Auckland-based fund manager and property investor said it has entered an agreement with Mansons Broadway, which will continue to construct the building at 33 Broadway, Newmarket.

BusinessDesk.co.nz

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