MARKET CLOSE: NZ shares rise in $1.4B-plus day on F&P Health, Contact reweightings

Thursday 30th November 2017

New Zealand shares gained on a day when turnover topped $1.4 billion, with trading dominated by Fisher & Paykel Healthcare and Contact Energy due to their reweighting in MSCI indexes.

The S&P/NZX50 Index rose 44.86 points, or 0.6 percent, to 8,186.82. Within the index, 26 stocks rose, 19 fell and five were unchanged. Turnover was $1.48 billion.

F&P Healthcare rose 0.4 percent to $13.10 with $702 million of stock changing hands as it entered a key MSCI index, while some $410 million of Contact traded as it left, falling 2.2 percent to $5.40. When a stock is included it means certain index-tracking investors, such as passive exchange-traded funds, have to buy the shares, with the reverse also true when a firm leaves it.

Spark gained 0.8 percent to $3.62 and Fletcher rose 1.3 percent to $6.94. SkyCity led the index, up 4 percent to $3.95.

"Generally, offshore guidance has been a bit mixed, but we are gaining into the close," said Peter McIntyre, investment adviser at Craigs Investment Partners. "We're seeing good volume through Spark and Fletcher Building again. Institutional investors are tending to buy Fletcher, it has been well-supported and has had a couple of big trading days."

Tourism Holdings rose 2.6 percent to $5.05.

"We put a positive research report out about the company, the fact is that with their US-based assets they have become more diversified and are expected to continue to perform," McIntyre said. "The company has a target of $50 million net profit, and there are parts of the market that think that figure is inevitable. Based on that, the multiple they're trading on is well below 15. It's seen as a bit of a value play and has had a tremendous run."

Genesis Energy advanced 2.6 percent to $2.38 while Heartland Bank rose 2.6 percent to $2.

Port of Tauranga was the worst performer, dropping 4.2 percent to $4.60. Auckland International Airport fell 2.2 percent to $6.38 and Metro Performance Glass dipped 2.1 percent to 92 cents.

Outside the benchmark index, Veritas Investments rose 25 percent to 7 cents. It has again had its debt deadline extended by its bank to let it continue discussions for possible deals. In August, ANZ Bank New Zealand said it wouldn't renew $28.5 million in banking facilities which come due in October and November this year.

That was extended in October, meaning the majority of its debt was due to mature today. It has now been pushed out until Feb. 28.

Scott Technology was unchanged at $3.70. Chair Stuart McLauchlan said the firm is confident it can survive the growing prospect of a US-led trade war with manufacturing around the world spreading its risk. McLauchlan reminded shareholders at today's annual meeting in Dunedin that he was hopeful US President Donald Trump's new administration would continue the work of its predecessors in liberalising trade flows.

(BusinessDesk)

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