MARKET CLOSE: NZ shares rise on bargain-hunting; Sky TV, Westpac, Air NZ gain

Wednesday 13th January 2016

New Zealand shares rose as investors were drawn to companies sold off since the New Year, such as Sky Network Television and Westpac Banking Corp, while Air New Zealand benefited from lower fuel costs. Warehouse Group and New Zealand Refining Co fell.

The S&P/NZX 50 Index gained 39.52 points, or 0.7 percent, to 6151.87. Within the index, 30 stocks rose, 12 fell and eight were unchanged. Turnover was $119 million.

"Confidence was definitely knocked a bit at the start of the year by China and oil, and we're seeing a bit of the volatility we saw last year," said Robert Garden, investment adviser at Craigs Investment Partners. "Our markets held up reasonably well in light of what's been going on, but with the focus on China there are a lot of unknowns and a lot of variables at play."

Sky TV led gainers, rising 3.6 percent to $4.27. The stock had fallen 11 percent from the $4.64 reached on Dec. 29 with nine consecutive sessions of losses. It has declined from as high as $6.41 in May as increased competition from the likes of Netflix threatened subscriber numbers.

"Sky TV has bounced off a low level," Garden said. "The dividend at this point in time is quite attractive, still over 9 percent. The question is whether that's going to stay in place with big structural changes in the sector. The business model isn't broke at this point in time, but the last results announcement was the drop in subscriber numbers, and that's what the market will be looking at next time around."

The low price of oil - with Brent Crude currently sitting at $31.10 a barrel - had an impact on stocks today. Air New Zealand gained 2.2 percent to $3.015, while New Zealand Refining Co dropped 1.4 percent to $3.63.

"There's always winners and losers from a drop in the oil price," Garden said. "Air New Zealand is performing well, and oil prices looking like they're going to stay low for longer gives investors more confidence to go into that stock, as long as global demand for air travel doesn't get hit as well."

Across the Tasman, the S&P/ASX 200 Index was up 1.2 percent in afternoon trading, after a nine-day slide. Dual-listed banks gained, with Westpac Banking Corp up 2.6 percent to $33.44 and Australia & New Zealand Banking Group climbing 2.3 percent to $27.28.

Metro Performance Glass rose 1.9 percent to $1.64, Argosy Property advanced 1.7 percent to $1.17, and Freightways gained 1.6 percent to $6.27.

Warehouse Group was the worst performer on the index today, falling 1.5 percent to $2.67. The retailer has given back some of its gains, having risen 5 percent on Monday after announcing its first-half profit would be a 20 percent improvement on a year earlier.

Steel & Tube Holdings dropped 1.3 percent to $2.22, Mainfreight fell 1.3 percent to $15.06, and NZX declined 1 percent to $1.04.

Outside the benchmark index, Pushpay Holdings gained 14.5 percent to $7.25, a one-month high. The mobile payments app developer, which targets churches in the US, saw more revenue flow through its system in the final quarter of last year, and is confident of achieving its medium-term target.

Annualised committed monthly revenue (ACMR), which measures the total billings through merchants that Pushpay collects fees from, increased to $20.4 million in the three months ended Dec. 31, from $14 million in the three months ended Sept. 30.

BusinessDesk.co.nz

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