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MARKET CLOSE: NZ shares up 1.4% on first trading day of the year; Ryman, Auckland Airport, ANZ gain

Wednesday 4th January 2017

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New Zealand shares rose on the first trading day of the year, buoyed by overseas sentiment, with Ryman Healthcare, Auckland International Airport and Australia & New Zealand Banking Group gaining.

The S&P/NZX50 Index gained 93.09 points, or 1.4 percent, to 6,974.31. Within the index, 29 stocks rose, 13 fell and eight were unchanged. Turnover was $121.5 million.

Wall Street set the tone for the Asian trading session, with the Standard & Poor's 500 index up 0.9 percent as the latest US manufacturing and building data stoked optimism about the strength of the US economy. 

"The first day of trading from the US was a decent day and we've followed suit, the year's started off in reasonably good heart in terms of market sentiment. There isn't a whole lot of news out there, markets are in wait-and-see mode," said Mark Lister, head of private wealth research at Craigs Investment Partners. "You'd think there's a bit of value in the local market heading into the new year, given that December quarter was the weakest quarter we've had since the June 2010 quarter, down 6.5 percent, and the first negative quarter in five quarters. Although we still generally look reasonably well priced, there's certainly more opportunity than three or four months ago."

Ryman Healthcare led the index, gaining 3.6 percent to $8.40, while Auckland International Airport advanced 3.5 percent to $6.47 and Fisher & Paykel Healthcare Corp rose 2.9 percent to $8.77.

"Some of the blue chips are performing well - Auckland Airport, Fisher & Paykel Healthcare which is obviously a beneficiary of a weaker NZ dollar, the US dollar's still pretty strong so maybe that's giving it a little bit of support at the moment," Lister said. "Spark's up, Port of Tauranga's up, they're keeping the market buoyant for the first day of the year." 

Spark New Zealand gained 2.6 percent to $3.50, while Port of Tauranga was up 2.6 percent to $3.95.

Dual-listed ANZ gained 3.3 percent to $32.69. The bank has agreed to sell its 20 percent holding in Shanghai Rural Commercial Bank for $1.9 billion, or 9.19 billion yuan.

Comvita was the worst performer on the index, down 5 percent to $7.63.

"It's quite a bit lower than where it peaked last year at almost $13, but I don't think there's much in that," Lister said. "It's a smaller company that's not quite as liquid as some of the others, it tends to make some big share price moves on relatively modest volumes. They've obviously had some challenges with the sales into China through some grey channels, that's been weakening off."

Stride Property dropped 2.3 percent to $1.73, while Investore Property declined 0.7 percent to $1.36.

"Property stocks are showing some weakness - I think that's probably a further unwinding of the yield trade taking place, interest rates moved up pretty sharply in the second half of 2016 and most people are of the view that will continue," Lister said. "Some of these higher-yield sectors that don't offer much growth are getting sold off, and a few of the property stocks are weaker on the back of that ongoing dynamic."

Warehouse Group fell 2.1 percent to $2.79. Lister said the retailer had seen some weakness after it issued a profit warning late last year about Christmas trading. 

Outside the benchmark index, Plexure Group dropped 6.3 percent to 30 cents. The digital advertising firm, formerly known as VMob, says it has passed $10 million in annualised committed monthly revenue (ACMR) after signing a new $1 million contract with an undisclosed client.

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