MARKET CLOSE: NZ shares rise, Infratil and Tegel gain while A2 drops

Monday 19th December 2016

New Zealand shares rose, led by Infratil and Tegel Group Holdings, while A2 Milk extended its decline.

The S&P/NZX 50 Index gained 26.01 points, or 0.4 percent, to 6,786.25. Within the index, 29 stocks rose, 14 fell and seven were unchanged. Turnover was $94 million.

Infratil led the index, up 3.7 percent to $2.695, having dropped 5 cents to $2.60 on Friday. Tegel gained 3 percent to $1.36. The shares hit a record low $1.29 last Thursday after the poultry producer posted a 4 percent decline in first-half earnings as margins were squeezed by a glut of chicken keeping domestic prices low.

Chorus gained 1.4 percent to $3.94. The telecommunications network operator has named Telstra executive Kate McKenzie as its new chief executive, replacing Mark Ratcliffe who led its split from Telecom five years ago.

"The stock has had a good couple of sessions, I don't think the movement today is anything to do with the appointment, it has just bounced off its lows," said James Lindsay, senior portfolio manager at Nikko Asset Management. Chorus shares reached an 11-month low of $3.505 in mid-November, but have gained since then.

Genesis Energy rose 2.7 percent to $2.06 and Sky Network Television advanced 2.2 percent to $4.17.

A2 Milk Co was the worst performer on the index, down 3.7 percent to $2.07, while Comvita was the second-worst performer, dropping 1.7 percent to $8.60. A2 began declining last Monday on the news that rival Australian formula producer Bellamy's had gone into a trading halt on the ASX, and had dropped 14 percent before a bounce on Friday, but fell again today.

"They continue to be weak, Bellamy's is yet to come out with any news - it's boggling peoples' minds about why they are taking so long, it's an unusually long delay and I can't see too many positive things out of that," Lindsay said. "It's having an impact on the perception of A2 and Comvita, it might have implications on the grey channel of selling that sort of product into Asia."

Ebos Group dropped 1.7 percent to $16.20 and Vista Group International fell 1.5 percent to $5.42

Outside the benchmark index, Airwork Holdings was unchanged at $4.85 and is up 24 percent this year. Zhejiang Rifa Holding Group said it has acceptances for 59 percent of Airwork shares in its partial takeover of the Auckland-based aircraft services business. It has offered to buy up to 75 percent of the shares at $5.40, valuing the target company at $271 million.

BusinessDesk.co.nz

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