MARKET CLOSE: NZ shares mixed, Spark and Air NZ gains while A2 Milk drops

Thursday 16th June 2016

New Zealand shares were mixed amidst Brexit concerns; Spark New Zealand and Air New Zealand gained, while A2 Milk dropped.

The S&P/NZX 50 Index rose 19 points, or 0.3 percent, to 6,888.56. Within the index, 26 stocks fell, 15 rose and nine were unchanged. Turnover was $175.8 million

"There's quite lacklustre buying in the market place, obviously there's still nervousness over the upcoming British vote," said Grant Williamson, director at Hamilton Hindin Greene, adding that volatility could see increased volume in the market as the EU referendum date of June 23 draws closer.

Spark New Zealand advanced 2.4 percent to $3.595.

"There's a little bit of rumour in the marketplace that they'll try to do something to negate the advantage Vodafone/Sky TV potential merger might have on demand," Williamson said. "It'll be interesting to see their reaction as time goes on. It's going to be quite attractive for customers if you can bundle up services like telecommunications and cable TV, we are going to see more of that - it's certainly quite big in America, so New Zealand is starting to latch on."

Sky Network Television dipped 0.2 percent to $4.98. The share price is up 8.7 percent for the year, having plummeted in May as subscriber numbers dropped before being revived by news of the potential merger with Vodafone. Sky directors have recommended shareholders vote on July 6 in favour of the deal which will give Vodafone Europe a 51 percent share of the combined group.

Air New Zealand gained 0.9 percent to $2.14. The airline announced its passenger numbers for May, up 4 percent on a year earlier, led by long-haul passengers to the Americas and the United Kingdom.

"It's been a share price that has been under a fair bit of pressure, mainly on predictions yield rates are going to reduce as time goes on, but today the announcement certainly wasn't as bad as investors have been expecting, so the share price has rallied a little bit," Williamson said.

New Zealand Refining Co rose 3.1 percent to $2.69 and Auckland International Airport gained 2.7 percent to $6.46.

A2 Milk Co dipped 2.3 percent to $1.73, having soared yesterday when the milk marketing company raised its full-year guidance and said it is well placed to cope with changes to infant formula regulations in China. A2's revenue is now forecast to be in a range of $350 million to $360 million in the year ending June 30, from a previous forecast of $335 million to $350 million.

Kathmandu Holdings was the worst performer, down 2.7 percent to $1.44, and Mainfreight dropped 2.3 percent to $16.60.

Outside the main index, Trilogy International was unchanged at $4. Its largest shareholder Business Bakery will reduce its holding, taking advantage of a 326 percent gain in the skincare and home fragrance company's shares in the past 12 months.

"In the last 18 months, it's been one of the best-performing stocks on the market - obviously the sell-down from the major shareholder will increase liquidity and make it more attractive for some investors," Williamson said.

ASX-listed APN News & Media fell 1.6 percent to 63 cents.The Auckland-based publisher and radio network operator will operate as a standalone listed company after the plan to demerge NZME got 99.98 percent backing at today's special meeting in Sydney. The deal frees up APN to focus on Australian radio and outside advertising business, while NZME can pursue its merger with rival Fairfax New Zealand.

BusinessDesk.co.nz

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