MARKET CLOSE: NZ shares gain, led by A2 as potential bidder unmasked; dividends appeal

Wednesday 24th June 2015

New Zealand shares rose, in heavier than average trading, as A2 Milk Co again led the risers, Kathmandu rose again and Sky Network Television advanced after securing its rights to content against a soon to be phased out 'global mode'.

The benchmark S&P/NZX 50 Index advanced 3.35 points, or 0.06 percent, to 5775.48. Within the index, 25 stocks rose, 16 fell and nine were unchanged. Turnover was $160 million, the second in a row above $150 million.

A2 rose 5.6 percent to 75 cents, the highest in a year, after the milk marketer confirmed the name of a second bidder teamed with Freedom Foods, which already has an interest in 19 percent of A2. Dean Foods of the US would provide access to the US market for A2's milk, which is marketed on the claimed benefits of the protein variant versus A1 mixed milk sold by rivals. Synlait Milk fell 0.8 percent to $2.51 and the Fonterra Shareholders' Fund rose 0.2 percent to $4.92.

Sky Network Television, the country's biggest pay TV company, rose 1.6 percent to $6.20, to be little changed on the year. It was part of a consortium of telecommunications companies and broadcasters that cut a deal with rebel internet service providers, effectively blocking Kiwis from accessing global content in breach of the firms’ local rights. In a statement to the NZX, Sky said the legal proceedings against ISPs offering ‘global mode’ have been dropped after the parties reached a settlement that will end the service from Sept. 1.

“It’s more of a medium term issue that they’ve held back rather than one that’s necessarily a massive one right now,” said James Lindsay, who helps manage $400 million for Nikko Asset Management. “You’ve seen Sky subscriptions being relatively flat to slightly weak, so that is obviously showing that the market is changing.”

Spark New Zealand, the biggest customer on Chorus's copper lines, was unchanged at $2.79. Chorus rose 0.3 percent to $2.96.

Tower was the biggest decliner, falling 3.2 percent to $2.14. Today the general insurer said it may face claims worth $5.8 million from storms across central New Zealand this week, after receiving more than 200 claims from the event.

Heartland New Zealand, the Christchurch based lender, rose 2.6 percent to $1.19. Kathmandu, the outdoor equipment retailer, rose 2.9 percent to $1.40, picking up after a 56 percent slump over the past 12 months.

The local bourse is still up 3.7 percent this year, as low interest rates draw offshore investors seeking returns from a market offering a dividend yield of 5.1 percent. With potential for local interest rates to be cut again and a drop in the kiwi dollar that some see as a positive adjustment.

"In New Zealand we have had a welcome fall in the TWI and in the kiwi against the Australian dollar, euro and pound," said Tim Kronfeld, senior dealer in derivatives at OMF. "That will give the tradable sector as a whole some help." There were signs the economy is buoyant including the most recent migration data, he said.

Fletcher Building, which has operations in Australia, rose 0.9 percent to $8.28. Diligent Board Member Services, the boardroom app maker, rose 1.3 percent to $5.47. Air New Zealand, which today lifted its profit guidance by as much as 60 percent, rose about 1 percent to $2.55 .

Freightways declined 2.4 percent to $5.81 and Orion Health Group fell 2.3 percent to $4.20.

BusinessDesk.co.nz

Comments from our readers

No comments yet