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MARKET CLOSE: NZ shares join Asian rally as Chinese data boosts investor confidence

Monday 1st April 2019

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New Zealand shares continued their march higher, joining a rally across Asia as better than expected Chinese manufacturing data lifted investor confidence. Tourism Holdings led the market higher. 

The S&P/NZX 50 Index increased 8.96 points, or 0.1 percent, to a record close 9,853.91. Within the index, 28 stocks rose, 19 fell, and three were unchanged. Turnover was $127 million. 

Stock markets across Asia rose after the Caixin/Markit manufacturing purchasing managers' index showed unexpected expansion in March, with new orders at their highest level in four months. China's Shanghai Shenzhen CSI 300 Index was up 3.9 percent in afternoon trading. Singapore's Straits Times Index rose 0.3 percent and South Korea's Kospi 200 Index gained 0.5 percent. 

"Usually there's quite a bit of window-dressing coming out of March and you can have a bit of a decline on the first day of April," said Peter McIntyre, an investment adviser at Craigs Investment Partners. 

"The flash PMIs from China were expected to be in the high-40s and they come out above 50, so Asia's trading really strongly." 

Low interest rates have pushed the benchmark New Zealand index into record territory, as the dominance of defensive stocks with regular dividend payments attract investors in search of yield. 

McIntyre said the benchmark index was close enough to 10,000 that it was odds-on to break through the level.

It's taken the NZX50 - a gross index that includes dividends - just over five years to double from a level of 5,000. Prior to that, it took about five years to double from February 2009, when it was near a trough in the wake of the global financial crisis. 

Tourism Holdings led the market higher, up 4 percent at $4.93, on a smaller than usual volume of about 78,000 shares. 

Sky TV rose 3.9 percent to $1.34 on a volume of 346,000, about a third of its 90-day average. The pay-TV operator hit an all-time low last month as investors questioned whether its new management will be able to turn it around.

An area where it's been vulnerable is in losing sports broadcasting rights to Spark New Zealand, however, the telecommunications company's online platform - currently in a soft launch - experienced some technical issues during practice sessions of the latest Formula One Grand Prix over the weekend. Spark shares increased 0.5 percent to $3.82 on a volume of 2.8 million shares. 

Genesis Energy was the most traded stock, with 4.4 million shares changing hands, more than 10 times its three-monthly average. The shares hit a record $3.28 today, and ended the session at $3.27, up 1.6 percent. They shed rights to an 8.45 cent dividend payment on Wednesday, April 3. 

Skellerup Holdings gained 0.5 percent to $2.12 on a volume of a million shares, compared to its 90-day average of 187,000. 

Of other companies trading on volumes of more than a million, Air New Zealand rose 0.5 percent to $2.58, Auckland International Airport gained 1 percent to $8.22, Meridian Energy was up 0.4 percent at $4.20, Precinct Property New Zealand gained 0.6 percent to $1.57 and Z Energy rose 0.5 percent to $6.28. 

Vital Healthcare Property Trust fell 0.5 percent to $2.155 on a volume of 681,000 units, more than twice its average, after manager NorthWest Healthcare Properties Real Estate Investment Trust announced changes to its fee structure. The tiered structure and introduction of new fees made it unclear whether it will increase or decrease the fees paid. 

Restaurant Brands New Zealand fell 6.2 percent to $8.21, the biggest fall on the benchmark index. Finaccess Capital's partial takeover offer closed last week, with the Mexican firm attracting 91 percent of acceptances, meaning it will scale down what it buys from selling shareholders to ensure it ends up with a 75 percent stake.

Infratil rose 1.9 percent to $4.25 after selling its half-stake in an Australian student accommodation venture for A$162 million. 

Outside the benchmark index, PGG Wrightson rose 2 percent to 50 cents. Cornerstone shareholder Agria agreed to sell a 2.2 percent stake to the Cushing family's H&G investment vehicle at 49 cents a share. The deal is subject to Agria getting bank approval. 

Blis Technologies jumped 28 percent, or 0.5 of a cent, to 2.3 cents, after the biotech firm said annual earnings beat expectations with strong orders in the March quarter. 

(BusinessDesk)



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