MARKET CLOSE: NZ shares gain as investor hunt bargains; Tower, Ryman, FPH rise

Wednesday 14th October 2015

New Zealand shares as bargain hunters sought oversold stocks. Tower, Ryman Healthcare and Fisher & Paykel Healthcare gained.

The S&P/NZX 50 Index rose 24.32 points, or 0.4 percent, to 5727.14. Within the index 28 stocks rose, 14 fell and eight were unchanged. Turnover was $102 million.

F&P Healthcare, the breathing apparatus manufacturer which has declined 3.2 percent over the past month, led the benchmark index higher, up 2.1 percent to $7.35. Tower, the general insurer which has declined 11 percent over the last 3 months, climbed 1.6 percent to $1.92. Ryman Healthcare, the retirement village operator which has fallen 9.5 percent over the past 3 months, gained 1.2 percent to $7.37. Sky Network Television, the pay-TV operator which was quarter's worst performing stock on the NZX 50, advanced 0.6 percent to $5.11. Spark New Zealand, the telecommunications company which has dropped 5.5 percent in the last month, increased 1.3 percent to $3.09.

"We seem to be seeing some bargain hunting in the stocks that have been sold off," said James Smalley, director at Hamilton Hindin Greene. "But it is muted on our market today."

In a speech today, Reserve Bank governor Graeme Wheeler reiterated he is likely to cut interest rates again, although he is also conscious of the risk that low borrowing costs inflame the housing market and wants to retain some capacity to ease policy in the event of a global downturn.

That pushed dividend paying equities higher. Precinct Properties New Zealand advanced 1.7 percent to $1.18. Property For Industry rose 0.7 percent to $1.49. MightyRiverPower climbed 0.8 percent to $2.49. Stride Property gained 0.3 percent to $1.975.

"The market has taken him as more hawkish," said Smalley. "You've still got that substantial income differential by say what you've got on a one year term deposit and some of your lower risk yield plays on the market."

Ebos, the animal and healthcare firm, rose 1.2 percent to a fresh record close of $13.30.

Fonterra Shareholders' Fund fell 0.6 percent to $5.48. Fonterra Cooperative Group's long-term credit rating was cut by Standard & Poor's, which said its peak capital expenditure and rising debt levels had coincided with a high level of volatility in the global dairy market in fiscal 2015, weakening its financial risk profile.

Outside the benchmark index, Seeka Kiwifruit Industries, the country's biggest kiwifruit grower, fell 1.5 percent to $3.35. It cut its full-year profit forecast as it lost more fruit than expected late in the season due to a lack of storage. The Te Puke-based company expects profit in calendar 2015 to increase between 10 and 40 percent from $3.2 million in 2014, lower than the 30 to 40 percent range earlier forecast.

Pushpay Holdings, the mobile payments app developer, jumped 13 percent to $8.28 after reporting committed sales more than doubled in the first half as the number of customers exceeded expectations. Total annualised committed monthly revenue rose to $18 million in the six months ended Sept. 30, from $9.2 million as at March 31.

BusinessDesk.co.nz

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