MARKET CLOSE: NZ shares rise; F&P Healthcare at record on weak kiwi; Chorus, Spark gain on pricing

Thursday 2nd July 2015

New Zealand shares rose as a weak kiwi dollar boosted sentiment for exporters such as Fisher & Paykel Healthcare. Chorus and Spark New Zealand advanced after the Commerce Commission issued its ruling on wholesale telecommunications prices.

The S&P/NZX 50 Index rose 47.11 points, or 0.8 percent, to 5841.46. Within the index, 28 stocks rose, eight fell and 14 were unchanged. Turnover was $160 million.

The New Zealand dollar dropped below 67 US cents for the first time since mid-2008 after dairy prices fell to a six-year low in the GlobalDairyTrade auction. Exporters which benefit from a weaker currency rose. F&P Healthcare, the breathing apparatus manufacturer and exporter, advanced 3.2 percent to a record $7.20.

"The kiwi dollar is now back to 67 US cents and continues to be very weak, that's really starting to benefit the likes of Fisher & Paykel Healthcare," Matthew Goodson, managing director at Salt Funds Management said. "FPH is a real bellwether."

Chorus advanced 1 percent to $3.03. The regulator looks likely to settle on a price close to its original decision on what the telecommunications network operator can charge customers, though it probably won't backdate any update.

"The only real surprise in the Chorus outcome was the lack of any backdating. Effectively since December, Chorus has been collecting what it's going to be allowed to collect under this finding so normally in these situations you'd be allowed backdating. Otherwise the decision is pretty close to the draft."

Spark rose 1.3 percent to $2.82. The country's biggest telecommunications provider, which is Chorus's biggest customer, said 2015 financial guidance for low single digit growth in earnings before interest, tax, depreciation and amortisation and for a low single digit decline in revenue was unchanged. The company welcomed the regulator's split decision not to backdate the new pricing, and warned if the commission changes its mind that will "create more upward pressure on retail prices."

Fletcher Building gained 0.5 percent to $8.16. Fletcher Residential, a unit of the country's biggest construction company, has been named the preferred developer for an $800 million project in Christchurch's inner city as part of the government's plans for the next stage of the city's rebuild.

A2 Milk Co, the milk marketing company, led the benchmark index higher, up 4 percent to 78 cents.

Kathmandu Holdings rose 0.6 percent to $1.74. The outdoor equipment and clothing chain has urged shareholders to take no action on a full takeover offer from Briscoe Group pending the board's response and has retained Goldman Sachs as an adviser. Briscoe shares rose 1.4 percent to $2.84.

Infratil, the infrastructure investor, was the worst performer on the benchmark index, falling 0.8 percent to $3.145.

Outside the benchmark index, South Port New Zealand was unchanged at $4.58. The Bluff port operator said annual profit beat the top end of its guidance by about 7.1 percent after it reported stronger cargo flows in the final quarter of the financial year. Net profit was about $7.5 million in the 12 months ended June 30, ahead of the company's February forecast for earnings between $6.5 million and $7 million.

BusinessDesk.co.nz

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