MARKET CLOSE: NZ shares rise to record; Orion Health gains, SkyTV falls, SkyCity halted

Wednesday 11th May 2016

New Zealand shares reached a fresh record, as Orion Health Group advanced while Sky Network Television's losing streak continued and SkyCity Entertainment Group was put in a trading halt.

The S&P/NZX 50 Index gained 34.93 points, or 0.5 percent, to 6,944.33. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $218.2 million.

SkyCity Entertainment Group, which was halted from trading at $5.01, said it plans to raise $263 million by selling new shares to existing investors, enabling it to keep its debt in check and maintain its credit rating while funding expansion in Auckland and Adelaide.

"It's probably been the biggest news, the stock's in a trading halt but the update looked like things were a little weaker than we had expected," said Mark Lister, head of private wealth research at Craigs Investment Partners. "The equity raising obviously allows them to retain the Hobson St hotel, I guess they've taken the view that some of the proposals they received from the sale process undervalued it and they'd like to keep it so they're going to raise some money, repay some debt and retain that asset."

Also halted from trading was APN News & Media, which announced it is in talks with Fairfax Media about a potential merger of their New Zealand media assets this year. APN has separately outlined plans to demerge its NZME unit. Any transaction would require signoff from the Commerce Commission and other regulatory consents, agreement of the two boards and the companies' shareholders.

"We always welcome new companies, or bigger companies, entering the local market, so that's good news from our perspective," Lister said. "It's another investment option for people to look at."

Metro Performance Glass led the index, rising 4 percent to $1.82.

Orion Health Group gained 2.9 percent to $4.56. It has gained 38 percent this year while announcing a series of international deals for its health systems software.

"It continues to have a very good run - it obviously had a tough start as a listed company, and got as low as $2.49 in February but now it's almost doubled," Lister said.

Freightways rose 2.2 percent to $6.64.

Ryman Healthcare advanced 2 percent to $9.28. Its full-year results are due next Friday, and Lister said people were obviously expecting that to be a good result based on the way the share price is going.

Sky Network Television was the worst performer, falling 3.6 percent to $4.06 on its fourth day of losses. It fell 15 percent on Friday after saying subscriber numbers were expected to fall further this financial year, causing earnings next year to miss analyst estimates. The pay-TV operator said subscriber numbers dropped 1.5 percent last year to 851,561. It expects to lose 45,000 core residential pay-TV subscribers this year and gain about 25,000 subscribers for its online services such as Neon and FanPass.

New Zealand Refining Co dropped 3 percent to $2.61, Kathmandu Holdings fell 2.6 percent to $1.53 and Property for Industry declined 1.5 percent to $1.66.

Outside the main index, Hellaby Holdings fell 5.6 percent to $2.55. The diversified investment company is restructuring its business, with the chief operating officer and chief investment officer both resigning, and says it will update the market on guidance in three weeks after a weaker-than-expected second half.

Expected second-half gains from the oil and gas segment did not materialise, the company said, as ongoing oil price and production volatility had continued to impact on refinery maintenance schedules.

"They're basically adjusting their business model - a couple of resignations from senior executives, which I guess signals some decisions in the past which haven't worked with the benefit of hindsight, and a change in focus because they're not changing those roles," Lister said. "That's good, but the trading update from resources is subdued which I suspect is the key reason for the share price being down."

BusinessDesk.co.nz

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