MARKET CLOSE: NZ shares mixed as market prepares for earnings; Z, MetroGlass rise while Nuplex falls

Thursday 28th January 2016

New Zealand shares were mixed as investors prepare for next month's earnings season, while global volatility made defensive stocks such as utilities more attractive. Z Energy and Metro Performance Glass advanced, while Nuplex Industries fell.

The S&P/NZX 50 Index increased 7.76 points, or 0.1 percent, to 6149.70. Within the index, 22 stocks fell, 21 rose, and seven were unchanged. Turnover was $90 million.

"It was another directionless day for the market," said Paul Richardson, chief investment officer at Mint Asset Management. "I think some people are still away and the local market is waiting for news with reporting season around the corner."

Asian markets were mixed this afternoon following a poor performance on Wall Street overnight. Australia's S&P/ASX 200 was up 0.5 percent in afternoon trading, Japan's Nikkei was down 0.3 percent, and Hong Kong's Hang Seng rose 0.1 percent.

Z Energy led the index higher, up 2 percent to $6.56. and has fallen 4.9 percent this year. Richardson said energy stocks were among those to have done better in turbulent global trading so far this year, as were property stocks with reliable revenue like rent. Kiwi Property Group gained 0.7 percent to $1.36, and is unchanged for the year, outperforming the benchmark index which has fallen 2.9 percent so far this year.

Metro Performance Glass rose 1.9 percent to $1.63.

Spark New Zealand gained 1.9 percent to $3.31. The country's largest retail provider of fixed-line services won't lodge an appeal against the Commerce Commission's final decision on pricing for access to the ageing copper network, which is progressively being replaced by fibre-optic cable.

Australia and New Zealand Banking Group advanced 1.8 percent to $26.22. The stock, which is dual-listed on the NZX and the ASX, was catching up to gains made by its Australian counterpart, Richardson said. Westpac Banking Corp, the other dual-listed bank, rose 0.7 percent to $33.03.

Orion Health Group rose 1 percent to $3.04, and Fisher & Paykel Healthcare gained 0.7 percent to $8.64, with both exporters benefiting from a weaker currency.

Fonterra Shareholders' Fund rose 0.2 percent to $5.88. Fonterra Cooperative Group cut its forecast milk payout for this season as global milk supplies continue to outweigh demand, pushing out the timeframe for prices to recover for New Zealand's largest export commodity. The fund gives investors exposure to Fonterra's earnings stream, and benefits when farmgate prices fall as that's an input cost for the dairy processor.

Nuplex Industries was the worst performer, falling 2.3 percent to $4.19. Warehouse Group dropped 1.5 percent to $2.66, and Skellerup Holdings shed 1.4 percent to $1.43, a three-month low.

Air New Zealand fell 0.3 percent to $3.06, continuing to drift lower from its recent 13-year high. The airline announced last night that it will begin evening flights into Queenstown from July subject to regulatory approval, the first of a number of airlines expected to join suit.

New Zealand Refining fell 0.8 percent to $3.66. Analysts forecast the company to almost double its 2016 dividend after resuming full-year payments in 2015, which is set to deliver record earnings. The stock has gained 44 percent the past year, making it the fourth-best performer on the S&P/NZX 50 benchmark index.

BusinessDesk.co.nz

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