MARKET CLOSE: NZ shares rise, led by Tower, Fletcher

Tuesday 26th May 2015

New Zealand shares rose, led by Tower, after the general insurer lifted its dividend. Dual-listed stocks such as Fletcher Building and a2 Milk Co advanced as stocks on the ASX gained.

The NZX 50 Index rose 0.02 points, or 0.874 percent, to 5795.855. Within the index, 20 stocks rose, 27 fell and three were unchanged. Turnover was $104 million.

Tower led the benchmark index higher, rising 4.3 percent to $2.20 after the general insurer hiked its interim dividend and confirmed an on-market share buyback, while reporting a 36 percent gain in first-half earnings driven by rising premiums and fewer claims.

"What investors were very happy about was the increase in dividend," said Grant Williamson, director at Hamilton Hindin Greene. "The insurers are in a pretty good spot now with premiums much higher, as most of us are aware. Barring any major catastrophes they could be in a pretty good environment."

Across the Tasman, Australia's ASX/S&P 200 Index climbed 0.9 percent amid news reports that Australia's third-largest iron ore miner, Fortescue Metals, is in talks with a Chinese investor interested in taking a strategic stake. The good sentiment flowed through to dual-listed stocks, Williamson said. Fletcher, the construction and building supplies firm, advanced 0.8 percent to $8.64. A2 Milk, the milk marketing company, gained 2 percent to 52 cents.

"Australia's quite firm and that's helped us today," Williamson said.

Orion Health fell 0.4 percent to $4.83. The healthcare system software developer reported a $60.8 million loss in the year ended March 31, in line with its strategy to grow revenues before becoming profitable. Annualised revenue growth beat its prospectus forecast.

SkyCity Entertainment Group declined 0.9 percent to $4.35. The casino operator has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million.

Contact Energy fell 1.3 percent to $6.10, paring yesterday's 11 percent jump. The energy generator and retailer said it had ditched plans for now to invest in geothermal schemes offshore and will increase returns to shareholders, including a special dividend of 50 cents per share, payable June 23, and a new ordinary dividend payout ratio of 100 percent of underlying earnings after tax.

Outside the benchmark index, Scott Technology was unchanged at $1.37 after it confirmed it laid off 13 workers as the industrial automation firm looks to cut staff numbers at its Christchurch plant after taking on extra employees during a bumper year.

Green Cross Health dropped 3.2 percent to $2.41. The company, formerly known as PharmacyBrands, posted a 4.1 percent decline in annual profit to $14.4 million as its staff costs increased. Sales rose 25 percent to $322.4 million, while cost of sales rose 15 percent to $168 million.

BusinessDesk.co.nz

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