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MARKET CLOSE: NZ shares rise, Contact, Port of Tauranga gain, NZX drops on earnings

Tuesday 14th February 2017

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New Zealand shares gained, with Port of Tauranga, Metlifecare and Contact Energy rising, while stock market operator NZX dropping after posting its earnings.

The S&P/NZX 50 Index advanced 15.39 points, or 0.2 percent, to 7,150.89. Within the index, 26 stocks rose, 17 fell and seven were unchanged. Turnover was $126.93 million.

"It's a bit of a continuation of a theme - some good strong days offshore, we've followed most of the day, so it's a broad-brush rise today," said David Price, broker at Forsyth Barr. "It wasn't particularly large, the real brunt of reporting season is next week. You tend to get a bit of a flurry in the morning off the back of the results, conference calls and meetings following on."

Port of Tauranga rose 2.3 percent to $4.45, Metlifecare gained 1.7 percent to $5.50, and Vista Group International advanced 1.6 percent to $5.59.

Contact Energy rose 1.2 percent to $4.93. Yesterday, it posted a 12 percent gain in first-half underlying profit to $82 million while holding its dividend unchanged and trimming capital spending the face of weaker sales. Sales fell to $1.04 billion from $1.12 billion, and net income was $96 million compared with a loss of $116 million a year-earlier, which reflected impairments.

"They're continuing up after yesterday's result - I think that's probably more a relief rally than anything, there was probably a bit of fear that result could disappoint, and it was pretty much in line with what people expected," Price said.

NZX was the worst performer on the index, dropping 2.6 percent to $1.11. The stock market operator's annual profit dropped 62 percent to $9.2 million as it faced mounting costs from the protracted Ralec litigation and a new regulatory environment, and was compared against a 2015 result flattered by the gain on the sale of its Link Market Services division. Earnings before interest, tax, depreciation and amortisation fell 8.4 percent to $22.5 million, as operating expenses climbed 13 percent to $55 million, outpacing a 6 percent gain in revenue to $77.5 million.

"It's had a really strong run so it needed a decent announcement, and unfortunately as we've seen out of most NZX results, it's a continuation of a theme," Price said.

"Revenues are growing, we see markets and listing fees going strongly, but unfortunately it's outpaced by cost. Guidance was softer than expected, we were talking $30 million ebitda for the following year, they've got a range of $27 to $30 - a five percent decrease at the midpoint for us."

Trade Me Group fell 1.7 percent to $5.11, Skycity Entertainment Group dropped 1.5 percent to $3.87, and Fisher & Paykel Healthcare Corp declined 1.4 percent to $8.97.

Outside the benchmark index, New Zealand Oil & Gas was unchanged at 63 cents. The Wellington-based company, which is on the prowl for new investment opportunities, has sold its 27.5 percent stake in the Tui oil fields off the coast of Taranaki for US$750,000.

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