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MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce

Tuesday 12th November 2019

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New Zealand shares gained, led by Summerset Group, as retirement village operators extended their gains following signs of a recovery in the Auckland property market. Abano Healthcare jumped on a takeover bid. 

The S&P/NZX 50 Index advanced 42.81 points, or 0.4 percent, to 10,919.79. Within the index, 26 stocks rose, 20 fell, and four were unchanged. Turnover was $109.5 million. 

Summerset Group led the market higher, up 4.1 percent at $7.14 on a volume of just 99,000 shares, about a third of its 90-day average of 302,000. The retirement village operator hit a 13-month high and has gained 9.2 percent since Barfoot & Thompson sales data last week indicated Auckland's housing market was bouncing back after a subdued period.

Ryman rose 3.2 percent to a 14-month high of $14.02, and has gained 7.1 percent over the past week, while Metlifecare increased 2.4 percent to $5.12, an eight-month high, for a 5.8 percent gain since the Barfoot data. Metlifecare traded on a volume of 973,000 shares, well up on its 186,000 average. 

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the slower property market, especially in Auckland, had weighed on retirement village stocks over the past year-and-a-half, but that was starting to turn around. 

"It's been slow, but it's really starting to build some momentum," he said. "The retirement village operators are really carrying the market up today." 

Sky Network Television rose 1.1 percent to 92 cents after it secured the broadcasting rights for the 2022 and 2026 Commonwealth Games for an undisclosed sum. The coverage includes a free-to-air component, while digital access will be both live-streamed and on-demand. 

Spark New Zealand, which has been successfully encroaching on Sky's patch with its Spark Sport offering, fell 0.2 percent to $4.435 on a volume of 2 million shares, the most traded stock for the day. 

Mercury NZ increased 0.4 percent to $4.94 on a volume of 1.9 million shares, while Kiwi Property Group was unchanged at $1.565 on a volume of 1.9 million. Of other stocks trading on volumes of more than a million shares, Meridian Energy decreased 0.2 percent to $4.64, Fletcher Building increased 0.8 percent to $5.15, Precinct Properties New Zealand was unchanged at $1.80, and Goodman Property Trust slipped 0.2 percent to $2.095. 

NZX posted the day's biggest decline, down 3.1 percent at $1.25 on a volume of 48,000 shares, well down on its 277,000 average. 

Fonterra Shareholders' Fund units decreased 0.7 percent to $4.15. Institutional investors and private wealth investors have pared back their exposure to the fund in recent years, but chair John Shewan said he's confident they will return. 

Kathmandu Holdings fell 3 percent to $2.93, Restaurant Brands New Zealand decreased 0.7 percent to $11.76, and Z Energy increased 1.1 percent to $5.34. Statistics New Zealand figures today showed weaker retail spending on credit and debit cards in October, with fuel and hospitality spending the only two sectors to register increases in the month on a seasonally adjusted basis. 

Outside the benchmark index, Abano Healthcare rose 19 percent to $5.45 with 285,000 shares changing hands, almost 10 times its 29,000 average. The board today agreed to a scheme of arrangement with Australian private equity firm BGH Capital and the Ontario Teachers' Pension Plan Board in a $5.70 per share takeover. While that's a premium to the $4.58 price the shares closed at last week, it only goes back to the price they were trading at in March when it warned of weaker trading conditions. 

Davies said the company had been a poor performer in recent times and had been entertaining multiple bids, having fended off takeovers in the past. 

"The directors weren't happy with previous offers at superior rates, but obviously the market has changed a little bit and they've unanimously recommended shareholders take this offer," he said. 


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