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MARKET CLOSE: NZ shares extend gain as A2 buoyed by trade data

Wednesday 26th June 2019

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New Zealand shares rose for a third day, led by A2 Milk as trade data allayed some concerns over how new Chinese e-commerce rules will be applied. Auckland International Airport hit a record. 

The S&P/NZX 50 Index increased 29.98 points, or 0.3 percent, to 10,418.29. Within the index, 25 stocks rose, 17 fell, and eight were unchanged. Turnover was $135.7 million. 

A2 rose 2.7 percent to $14.62, leading the market higher, on a volume of 1 million shares, more than its 90-day volume of 812,000. The milk marketing firm had been under pressure in recent days on fears that the way Chinese authorities apply new e-commerce rules could hit the firm, given its exposure to China's formula market. 

Matt Goodson, managing director at Salt Funds Management, said strong Lyttelton Port data today helped ease some of those fears hanging over the company. 

"There's been some concerns around that stock with the tightening of the application of Chinese e-commerce laws, which may affect some of the lower end daigou," he said. "In some ways that plays to A2's advantage. They tend to deal more through corporate daigou, but it's been a source of uncertainty in the market."

Utilities, infrastructure stocks and property firms remained in favour as investors continue to pursue reliable income in a low interest rate environment. Auckland International Airport rose to a record $9.60, ending the day at $9.56, up 0.8 percent, on a smaller volume than usual of 851,000 shares. 

Goodson said there's been strong demand for Auckland Airport, despite the slowdown in its core business, and he described the surge in property stocks as "remarkable". 

"The market is still settling down from the significant index rebalancing on Friday," he said. 

Mercury NZ rose 1.9 percent to $4.34 and Contact Energy advanced 1.8 percent to $7.78 on 1.7 million shares. Investore Property increased 1.6 percent to $1.87, Kiwi Property Group rose 1.2 percent to $1.63 on 3.1 million shares, Vital Healthcare Property Trust advanced 0.4 percent to $2.54, and Argosy Property climbed 0.4 percent to $1.36 on 1.1 million shares. 

SkyCity Entertainment Group was the most traded stock on a volume of 3.1 million shares, more than three times its 896,000 average. It increased 0.5 percent to $3.83. 

Spark New Zealand fell 1.3 percent to $3.90 on a volume of 1.9 million shares, well short of its 5.3 million average. Among other stocks trading on volumes of more than a million shares, Meridian Energy was unchanged at $4.73, Infratil fell 1.3 percent to $.53, and Summerset Group decreased 0.4 percent to $5.42. 

Fletcher Building fell 2.4 percent to $5.33 on a volume on 1.2 million shares. The country's biggest listed construction firm is holding an investor day tomorrow and is expected to announce some form of capital return. 

Tourism Holdings posted the day's biggest fall, down 3.4 percent at $3.95 on a volume of 126,000 shares. The rental RV operator yesterday announced plans to raise $80 million to shore up its balance sheet. 

Synlait Milk dropped 3.4 percent to $9.20 and Scales Corp was down 2.3 percent at $4.67. 

Arvida Group was unchanged at $1.38, with its shares halted for a placement. The retirement village operator is raising money to help fund its $180 million purchase of three villages. 

Sky Network Television was unchanged at $1.20 after saying it won't deploy hardware it developed, with customers already well-served by the My Sky and SkyGo services. 

Heartland Bank's 2024 bonds paying annual interest of 3.55 percent were the most traded debt security with a volume of 435,000. The notes closed at an unchanged yield of 3.03 percent. Heartland Group shares increased 0.6 percent to $1.64. 


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