MARKET CLOSE: NZ stocks rise; Spark, Contact gain; SkyTV plunges to 6-year low

Thursday 22nd October 2015

New Zealand shares rose. Spark New Zealand and Contact Energy advanced as investors bought dividend-paying stocks, as Sky Network Television plunged to a six-year-low on its bleak earnings outlook.

The S&P/NZX 50 Index rose 5.33 points, or 0.09 percent, to 5923.59. Within the index, 23 stocks rose, 19 fell and eight were unchanged. Turnover was $189 million.

In a low interest rate environment investors were drawn to equities which will offer them a return on their investment. Spark, the telecommunications firm, advanced 2 percent to $3.285. Contact gained 0.4 percent to $5.10. MightyRiverPower rose 1.7 percent to $2.725. Stride Property increased 1.8 percent to $2.03.

There was buying in "mainly good yield stocks," said James Smalley, director at Hamilton Hindin Greene "They're offsetting a little bit of profit taking on some stocks that have had a pretty good run."

SkyTV was the worst performer on the benchmark index, down 2.4 percent to $4.57. Yesterday, New Zealand's dominant pay-TV company said it expects profit will fall as much as 11 percent in the 2016 financial year to between $153 million and $158 million, with largely flat revenue and increased capital expenditure. The company is battling to retain customers against the rise of on-demand streaming services, such as US content provider Netflix.

"There's increased concern about churn as people move to the internet and post-world cup," Smalley said. "People might be on the tactical withdrawal."

Nuplex Industries, the resin maker firm, fell 0.5 percent from a record high to $4.38.

Orion Health Group, the healthcare management software developer, declined 2.2 percent to $3.57. SkyCity Entertainment Group, the casino operator, declined 1.5 percent to $3.86.

Metro Performance Glass, the largest glass supplier in New Zealand, was the best performer on the benchmark index, climbing 5.4 percent to $1.56.

It is also annual meeting season on the local bourse, with a number of companies telling shareholders their outlook for the coming year.

Vector fell 0.3 percent to $3.34. The Auckland gas and electricity distribution monopoly has told its investors it will be among the first customers in the world to take delivery of Tesla’s home and business batteries that store home-generated solar and wind power.

Port of Tauranga rose 0.6 percent to $17.60. New Zealand's biggest port company says earnings growth may stall in 2016 in the face of uncertainty over log and dairy volumes, which may offset growth in containers.

Auckland International Airport rose 0.4 percent to $5.25. The nation's busiest gateway expects capital expenditure to be as much as 27 percent more than earlier guidance, in what will be its biggest annual spend in over a decade, as it experiences strong growth, especially in tourism and property. It expects capital spending of between $230 million and $260 million in the 2016 financial year, ahead of an earlier forecast of between $190 million to $205 million, and about $148 million spent in 2015.

Fonterra Shareholders' Fund fell 0.6 percent to $5.32. Fonterra Cooperative Group's long-term credit rating has been cut by Fitch Ratings, the second global rating agency to do so in as many weeks, as falling dairy prices and a volatile market stretch the dairy exporter's balance sheet.

Outside the benchmark index, Trilogy International rose 2.7 percent to $1.88. The candle maker and skincare company was queried by NZX Regulation over its recent price increase, which has seen its stock advance some 18 percent from Oct. 16. Trilogy confirmed it was complying with continuous disclosure obligations.

BusinessDesk.co.nz

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