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MARKET CLOSE: NZ shares rise; Napier Port has promising debut

Wednesday 21st August 2019

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New Zealand shares rose as Napier Port Holdings climbed on debut, rising 13.5 percent to $3 from its IPO price of $2.60 a share. 

The S&P/NZX 50 Index rose 101.36 points, or 0.9 percent, to 10,803.84. Within the index, 28 stocks rose, 16 fell and six were unchanged. Turnover was moderate at $105.4 million.

Hamilton Hindin Greene investment adviser Grant Williamson said the local market was responding to strong markets overseas, with expectations interest rates may come down even further.

Napier Port was the standout today, trading as high as $3.04, with more than 16.1 million shares changing hands. Hawke's Bay Regional Council raised $234 million, selling 90 million shares, or 45 percent, of the port operator. 

"Everyone involved will be pleased with how it's gone," said Grant Davies, also at Hamilton Hindin Greene. "Demand out there for infrastructure stocks is high at the moment and it's an area where there's not enough supply."

Meridian Energy, which reports earnings next Monday, was the biggest gainer in the benchmark index today, rising 4.9 percent to $4.90. The 1.18 million shares traded was just ahead of its three-month average.

Index heavyweight A2 Milk also had a strong day with its shares rising 3.8 percent to $16.85. Shares in its supplier Synlait Milk rose 0.5 percent to $9.43. 

Mercury NZ nudged higher, closing at $4.95, up 0.2 percent, as the energy supplier posted an 11 percent drop in earnings, less than forecast. Net profit was up to a record $357 million from $234 million, a result Williamson described as "pretty acceptable", given a difficult environment for electricity generators. 

Fletcher Building shares rose 2.7 percent to $4.57, with almost 1.1 million shares traded, close to its average. Williamson said there was a bit of bargain-hunting ahead of the construction firm's result tomorrow. 

Z Energy led the market lower, falling 2.9 percent to $6.42, on slightly higher than usual volume of 1.04 million shares after a draft report from the Commerce Commission today suggested fuel retailers may be earning close to $400 million a year in excess returns, requiring changes to increase competition in wholesale fuel supply.

Spark New Zealand, also reporting earnings tomorrow, was the heaviest traded stock in the benchmark index, with 2.4 million shares traded. It fell 0.7 percent to $4.01.

Among stocks trading on volumes of more than a million shares, Kiwi Property rose 1.2 percent to $1.64 and Air New Zealand fell 0.7 percent to $2.73 ahead of earnings announcements due Thursday.

Outside the main index, shares in Comvita fell 4.9 percent to $2.71. The manuka honey-maker today deferred its annual results until later in the week, saying more time was needed to complete its audit. 

"They are looking at a possible impairment on some of their assets and their auditors will be doing their work. The market gets a bit nervous when they miss their due date for results so investors will be being careful," Williamson said. 


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