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MARKET CLOSE: NZ shares rise to new record; Auckland Airport, Xero gain while Orion falls

Tuesday 8th March 2016

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New Zealand shares rose to another record, led by Auckland International Airport as investors rallied behind blue-chip stocks with renewed confidence. Xero gained, while Orion Health Group fell. 

The S&P/NZX 50 Index advanced 27.8 points, or 0.4 percent, to 6,446.73. Within the index, 32 stocks rose, 16 fell and two were unchanged. Turnover was $147.7 million.

Auckland Airport climbed 3.7 percent to $6.895, an all time high. The airport today said the expiry of its current taxi licensing agreement provides an opportunity to change the way taxi services are provided to and from the airport. The stock has risen 17 percent, or just over $1, since Feb. 19, when the country’s largest airport reported a 25 percent lift in first-half profit as it plans to spend up to $260 million this financial year to expand its facilities.

The local bourse has gained for seven straight trading sessions and posted new records in the past three. Robert Garden, investment adviser at Craigs Investment Partners said the market has been driven by the positive performance of some of the larger companies such as Auckland Airport and Fletcher Building, which today rose 0.8 percent to $7.44, along with global positive sentiment.

"The general mood overseas has been pretty buoyant and that's been following through to our market," Garden said. "The sell-off in January was pretty significant, and we've more than recovered the losses."

Xero rose 3.5 percent to $15.58, a one-month high. 

"It's one of those stocks that when the sentiment towards risk becomes a bit more favourable, it tends to pick up a wee bit," Garden said. "Tech stocks have struggled over the past year with market volatility and global growth uncertainty, but the Nasdaq's bounced back recently, although it's still down on twelve months ago."

Tower advanced 3.1 percent to $1.68, SkyCity Entertainment Group gained 2.7 percent to $4.55, and Sky Network Television rose 2 percent to $4.52.

Summerset rose 1.5 percent to $4.08, even as it shed rights to a 3.4 cents per share dividend payment on March 24. 

Fonterra Shareholders Fund advanced 0.5 percent to $7.44. Fonterra Cooperative Group today cut its forecast payout to farmers for a second time this year, blaming Europe's continuing supply for depressing global prices. Units in the fund provide investors exposure to Fonterra's earnings stream, and typically benefits from a reduction in the farmgate milk price. 

Genesis Energy edged up 0.5 percent to $2.02. The Auckland-based electricity generator-retailer is looking to raise up to $100 million in a six-year bond at half the cost it's been paying on a note that matures next week. Record low swap rates have lured companies back to the debt market to raise funds, with Genesis joining the likes of rival Meridian Energy, Spark New Zealand, Auckland Airport, and Fonterra selling new bonds.

Trustpower crept up 0.3 percent to $7.55. The Tauranga-based company is seeking to overturn a Court of Appeal ruling backing Inland Revenue Department's decision to disallow $17.7 million in tax deductions on spending for a feasibility study when Trustpower took early steps towards obtaining resource consents over four potential generation projects in the South Island, two wind farms and two hydro schemes. An earlier High Court judgment sided with Trustpower.

Orion Health Group fell the most, down 3.2 percent to $3. The stock gained 26 percent over three trading sessions from Feb. 29 when it announced a deal to provide its Amadeus platform to Nasdaq-listed Cognizant Group, but has since fallen away. The stock is down 3.1 percent for the year.

Trade Me Group shed 3.2 percent to $4.29, New Zealand Refining Co dropped 2.5 percent to $3.46, and Ryman Healthcare fell 2.2 percent to $8.12.

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