MARKET CLOSE: NZ shares hit fresh high; Orion, Spark gain while Fonterra Fund drops

Wednesday 23rd March 2016

New Zealand shares edged to a fresh record high, with Orion Health Group and Spark New Zealand leading the index as investors shrugged off fears the Belgium terror attacks would weigh on the market.

The S&P/NZX50 Index rose 4.6 points, or 0.1 percent, to 6,668.87. Within the index, 21 stocks rose, 21 fell and eight were unchanged. Turnover was $159 million.

The local bourse has gained about 7 percent so far this month, and has more than regained its losses suffered at the start of the year when global turmoil dragged markets lower.

"It was a reasonably flat day today, but with low interest rates we are still seeing strong demand for high yield stocks," said James Smalley, director at Hamilton Hindin Greene. "In the absence of corporate news until the March balance date reporting season in May, investors will be focussed on macro events out of China, Australia and the United States.

The local market was not pushed down by terror attacks in Belgium overnight, dropping slightly on open, but rising throughout the day. Investors had been quick to realise the attacks would not affect businesses on the bourse, Smalley said.

Orion Health led the index, up 3.2 percent to $3.25. It dipped 1.3 percent yesterday, but the stock has gained 31 percent since Feb. 26 when it announced a deal to provide its Amadeus platform to Nasdaq-listed Cognizant Group. The Auckland-based company didn't put a value on the agreement when it was announced but said it gave Orion access to 190 million patients.

Spark rose 2.5 percent to $3.555, and Ebos Group advanced 2.2 percent to $16.60.

Fisher & Paykel Healthcare Corp gained 1.3 percent to $9.40, and has increased 6.5 percent so far this year.

A2 Milk Co was up 1 percent to $1.99, while processor Synlait Milk grew 2.4 percent to $2.97.

Fonterra Shareholders Fund fell 0.8 percent to $5.88. Fonterra Cooperative Group, the world's largest dairy exporter, doubled its interim dividend after shifting more production to higher-margin products in the face of weak milk powder prices and reporting a 123 percent jump in first-half profit. Units in the fund provide investors exposure to Fonterra's earnings stream, and typically benefits from a reduction in the farmgate milk price.

"It had a pretty strong week last week, so maybe investors have bought the rumour and anticipated the result," Smalley said. "Investors have realised that a weaker milk price is good for the fund when it means a wider margin."

SkyCity Entertainment Group was the worst performer, dropping 3.4 percent to $4.84

Sky Network Television shed 3.2 percent to $4.81, and Ryman Healthcare lost 1.5 percent to $8.34.

Outside the main index, Intueri Education Group dropped 1 percent to 47.5 cents. New Zealand's largest private training provider, whose Quantum Education Group unit is under investigation by the Serious Fraud Office, has extended its bank facility to $80 million as it makes the final payments for two acquisitions. The shares were sold at $2.35 apiece in its 2014 IPO.

Hallenstein Glasson Holdings rose 0.6 percent to $3.14. The retailer reported a 21 percent fall in first half profit to $6.8 million and warned a mild autumn was weighing on sales.

Food supplements maker Oceania Natural is set to become the third company to join NZX's NXT market in a compliance listing set for the end of the month valuing the firm at $15.9 million. Auckland-based Oceania Natural is expected to list about 25.7 million shares at 64 cents apiece on the NXT board on March 31, according to a stock exchange notice.

BusinessDesk.co.nz

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