MARKET CLOSE: NZ shares rise, led by TradeMe; Westpac, ANZ gain with ASX rally

Thursday 19th November 2015

New Zealand shares rose, led by auction site Trade Me Group, while a rally in Australian shares helped lift Westpac Banking Corp and Australia & New Zealand Banking Group.

The S&P/NZX50 rose 15.4 points, or 0.26 percent, to 5995.24. Within the index, 23 stocks rose, 19 fell and 8 were unchanged. Turnover was $127 million.

Trade Me rose 2.9 percent to $3.87, a six-month high.

The company has "lagged behind the market quite a bit recently," said Brian Gaynor, executive director at Milford Asset Management. "When markets run, investors look for stocks that haven't run in anticipation that they'll follow at some stage. Trade Me is a very good company, a very solid company but it hasn't participated much, so often investors buy some in anticipation it'll move in the next few months."

Westpac Banking Corp rose 2.7 percent to $34.30 and Australia & New Zealand Banking Group gained 1 percent to $29.95, helped by gains across the Tasman, with the S&P/ASX 200 Index up about 1.9 percent in afternoon trading.

"The Australian market has had a terrible month up to yesterday," Gaynor said. "It picked up yesterday and you find that when it does, the banks run with it. I wouldn't put it down as Westpac in itself, all the banks are up strongly in Australia today. It's really driven by the upturn in Australia."

Z Energy rose 2.2 percent to $6.55, and Sky Network Television rose 2.2 percent to $4.70.

Kathmandu Holdings rose 0.6 percent to $1.59 . Its board increased the compound annual earnings-per-share growth target for its chief executive's incentive scheme to a minimum of 17.5 percent at its annual meeting today, following unhappiness from shareholders about the scheme's initial, more generous settings.

Steel & Tube Holdings was the worst performer today, falling 2.2 percent to $2.20. The shares have fallen 21 percent this month, with Steel & Tube forecasting a drop in first-half profit, citing the impact of lower-priced Chinese steel in eroding margins.

Coats Group fell 1.7 percent to 58 cents. The UK-based threadmaker dropped 9.2 percent yesterday after announcing it plans to quit the ASX and NZX in a bid to cut down on the costs of multiple listings, as Australasian investors make up less than a fifth of its ownership. The London-based company wants to de-list from the ASX and NZX in June next year, leaving its sole listing on the London Stock Exchange.

Ryman Healthcare fell 1.6 percent to $7.46. Fonterra Shareholders' Fund dropped 1.5 percent to $5.40 after Fonterra Cooperative Group said it plans to sell its stake in the DairiConcepts ingredients joint venture with Dairy Farmers of America for some $196 million, saying the investment doesn't fit the company's strategy.

Trustpower fell 0.8 percent to $7.69. The Tauranga-based electricity producer downgraded its assessment of the potential production from the second stage of its Snowtown wind farm in South Australia by 9.4 percent, reducing operating earnings by around A$8.5 million a year "in a year of average wind" and cutting its valuation by as much as A$70 million. The company is controlled by Infratil, which fell 0.6 percent to $3.15.

"When that stock goes down 15 cents or up 10 cents, its not really indicative of anything, good or bad, because it's such a thinly traded stock," Gaynor said. "70 percent of it is held by Infratil and the local council so you don't get a lot of trading on it. Movements in that share price don't often reflect fundamentals. It could easily pick up again tomorrow, it's a hard stock to buy and very lightly traded."

Among smaller stocks, Turners Group rose 7 percent to 30.5 cents. The financial services company lifted profit nearly 50 percent as it considers further acquisition opportunities after a strong trading performance in the first half.

Veritas Investments rose 5 percent to 42 cents. The company expects to turn around its struggling gourmet supermarket chain, Nosh Group, in the second quarter of 2016, and affirmed its annual profit guidance as it sells off poorly-performing assets.

Rakon was unchanged at 26 cents. The high-tech components maker turned to a first-half profit and reiterated that it expects to post flat full-year earnings. Sanford was unchanged at $5.15 after New Zealand's largest listed fishing group reported a 38 percent drop in annual profit.

BusinessDesk.co.nz

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