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MARKET CLOSE: NZ shares rise as A2 and Fletcher Building recover recent losses

Tuesday 19th December 2017

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New Zealand shares rose, led higher by Freightways and Comvita, as a2 Milk Co and Fletcher Building rebounded from recent selling ahead of the Christmas holiday.

The S&P/NZX50 Index gained 57.05 points, or 0.7 percent, to 8,401.2. Within the index, 34 stocks rose, 13 fell and three were unchanged. Turnover was $125 million. 

"There's a strong Santa Clause rally that's ongoing and people looking to bed in the gains," said Shane Solly, director at Harbour Asset Management. "It's a pretty positive run into the Christmas period, topping off what's been a positive year. At the start of the year, not many people would have expected a 22 percent gain."

Freightways was the best performer, rising 3.5 percent to $7.78, and Comvita rose 3 percent to $8.24. 

Summerset Group Holdings rose 2.1 percent to $5.34. The Wellington-based retirement village developer and operator lifted full-year earnings guidance on strong resales volumes and margins as well as good margins on new occupation right sales. It expects underlying profit to be in a range of $77 million-to-$79 million in calendar 2017 versus prior guidance of $72 million-to-$75 million, it said in a statement. That represents an increase on the previous year’s underlying profit of between 36 percent and 40 percent, it said.

"That's a pretty helpful upgrade, really highlighting that there is some resilience in the broader New Zealand economy," Solly said. 

A2 Milk rose 2.3 percent to $8.15.

"It has really been recovering from the transitional activity around the movement from the ASX 200 index to ASX 100 index late last week," Solly said. "It fell late last week when it was removed from the ASX 200 index, which tends to have quite a broad following." 

Fletcher Building gained 1.6 percent to $7.72.

"It's had quite a strong recovery from its recent low of $6.73 back at the end of November. There's anticipation of recovery from the new management team," Solly said.

Tourism Holdings was the worst performer, down 1.9 percent to $5.30. Z Energy dropped 1.4 percent to $7.93 and Auckland International Airport fell 1.3 percent to $6.61.

Outside the benchmark index, ikeGPS shares jumped 19 percent to 37 cents after the company announced a $200,000 contract with Canada’s largest communications company and said it might exceed previous sales guidance. The contract with Bell Canada involves the laser measurement toolmaker's Ike 4 device, which is the biggest contributor to FY18 financial targets for revenue growth and progress to breaking even on a cash basis. Revenue from the first phase deployment of the system will be about $200,000, it said.

NZME was unchanged at 87 cents. The High Court has rejected NZME and Fairfax New Zealand's attempt to overturn a Commerce Commission ruling against a proposed merger of the country's dominant newspaper publishers and upheld the regulator's right to rely on the shrinking number of voices in the market. 


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