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MARKET CLOSE: NZ shares rise; retirement stocks Metlife, Summerset extend recovery

Monday 15th April 2019

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New Zealand shares edged higher as retirement stocks Summerset Group and Metlifecare continued to recover from a sharp selloff. Air New Zealand and Tourism Holdings fell in the wake of weaker tourism numbers.

The S&P/NZX 50 Index increased 1.73 points, or 0.02 percent, to 9,768.33. Within the index, 22 rose, 19 fell and nine were unchanged. Turnover was $95.6 million, with just three companies trading on volumes of more than a million shares. 

Retirement stocks rose for a second day having spent most of the week under pressure since Summerset last Friday cited slowing property markets in Auckland and Christchurch among reasons for its weaker first-quarter unit sales. Housing data today showed activity remained weak in Auckland, while national house price inflation slowed. 

Metlifecare led the market higher, up 2.2 percent at $4.69 on a volume of 182,000 shares, down on its 205,000 three-month average. Summerset increased 1.8 percent to $5.81 and Ryman Healthcare rose 0.8 percent to $11.60. Arvida Group fell 1.5 percent to $1.29. 

"The kiwi market's a bit lower this week, weighed down by the retirement village stocks," said Greg Smith, head of research at Fat Prophets. "They've bounced a little bit today." 

Smith said the property market has been a tailwind for the sector in recent years, but the slowdown may turn it into a headwind. 

Spark New Zealand was the most traded stock on a volume of 2.5 million shares, less than half the usual six million. It rose 2.1 percent to $3.635. Precinct Properties New Zealand increased 1 percent to $1.565 on a volume of 1.7 million shares, almost twice its 90-day average of 888,000. Auckland International Airport fell 0.4 percent to $7.965 on a volume of 1.5 million shares. 

Air New Zealand posted the biggest decline, down 2.8 percent at $2.74 on a lighter volume than usual of 720,000 shares. Stats NZ figures showed visitor arrivals shrank in February from a year earlier, with a steep drop in Chinese tourists during the Lunar New Year. Tourism Holdings fell 0.8 percent to $5.05 on a volume of 72,000 shares, down on its 90-day average of 108,000. 

Infratil rose 2.1 percent to $4.30. First NZ Capital affirmed its 'neutral' rating for the stock today, while raising its target price to $4.37 on a higher valuation for the Canberra Data Centres and adjusting for the low interest rate environment.

Of companies in Infratil's portfolio, Trustpower fell 0.3 percent to $6.98, and Tilt Renewables decreased 0.9 percent to $2.30. Two of Wellington International Airport's five listed bonds traded today - its 4 percent 2030 bond traded at an unchanged yield of 3.55 percent, while its 5 percent 2025 bonds traded at a yield of 3.26 percent, up 5 basis points. 

Restaurant Brands hit a record $9.30, and ended the day at $9.15, up 1.7 percent. Mexico's Finaccess Capital paid $9.45 a share for 75 percent of the fast food operator. 

Chorus rose 0.8 percent to $6.03 on a volume of 279,000, about half its 90-day average. The network operator will change its supply chain in response to an independent review of its subcontracting model which created vulnerabilities for migrant workers to be exploited. The changes won't require any variations to the company's contracts with Visionstream and UGC. 

New Zealand Refining increased 0.5 percent to $2.08. The board and management told shareholders at today's annual meeting that they will provide a strategy update in June. 

Outside the benchmark index, AFT Pharmaceuticals fell 2.2 percent to $1.75 after the maker of Maxigesic got its intravenous painkiller licensed in Mexico and its tablets in Switzerland and Cyprus. 

NZME rose 4.8 percent to 55 cents on a volume of 2 million shares, its busiest day since September last year. That equates to about 1 percent of NZME's issued stock. Auscap Asset Management is the company's biggest shareholder with a 19.3 percent stake, followed by Renaissance Asset Management with 12 percent and Forager Funds with 6.3 percent. 


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