MARKET CLOSE: NZ shares rise, led by A2 Milk's rebound after results losses

Tuesday 6th September 2016

New Zealand shares reached a fresh record despite a lack of corporate news, with A2 Milk Co, Ebos Group and Contact Energy leading the index higher.

The S&P/NZX50 Index rose 11.5 points, or 0.2 percent, to 7,503.53. Within the index, 25 stocks rose, 18 fell and eight were unchanged. Turnover was $133.1 million.

The index was buoyed yesterday after Nuplex shares ceased trading on the NZX at the close of trade, with money reallocated pushing most stocks higher, Craig Stent, director and research analyst at Harbour Asset Management, said. Nuplex shares will be delisted from the NZX and ASX at the close of trading on Sept. 13.

A2 Milk Co was the biggest gainer, up 3.2 percent to $1.96. It dropped 17.8 percent to $1.89 over eight trading sessions after its full year results were released in late August when it announced a return to full-year profit and a 127 percent jump in revenue that was driven by infant formula sales in Australia and China. Investors were concerned about growth in the United States, where progress is behind schedule, which A2 attributed to delays in achieving distribution with a number of larger retailers.

"There are a few offshore buyers, it obviously came under pressure post its earnings result so a bit of a bounce back today," Stent said.

Ebos Group rose 3 percent to $19.39, Contact Energy advanced 2.6 percent to $5.18, and Metro Performance Glass rallied 2.4 percent to $2.17.

Steel & Tube Holdings gained 2.3 percent to $2.27, while Skellerup Holdings advanced 1.5 percent to $1.38. Both will drop out of the NZX 50 index on Sept. 16, to be replaced by agribusiness group Scales Corporation and cinema software developer Vista.

Steel & Tube shares hit a fifteen-year low of $1.79 in June after a difficult few months. In March the Commerce Commission began an investigation into earthquake reinforcing mesh products that weren’t certified as claimed, and the company was forced to cut guidance in May as intense competition in the domestic steel market squeezed margins and its Chinese-sourced road reinforcing for the Huntly bypass was found to be weaker than specified.

"It's only back where it was a couple of months ago," Stent said. "Logically, you would expect Steel & Tube and Skellerup to face pressure coming into that event, and likewise Vista and Scales on the positive side. They're not big index positions, so at the margin, they get knocked around a wee bit."

SkyCity Entertainment Group was the worst performer, down 2.5 percent to $4.66, while Kathmandu Holdings dropped 2 percent to $1.95 and Orion Health Group fell 1.5 percent to $4.02.

Argosy Property was unchanged at $1.165. The country's fourth-biggest listed property investor has announced the sale of two sites for a combined total of $9.3 million - one in Auckland and another in Palmerston North.

Outside the main index, Veritas dropped 6.3 percent to 30 cents and has fallen 33 percent this year. The Inland Revenue Department has filed an application to liquidate the business behind the Silverdale Mad Butcher store, the latest issue to hit the listed hospitality company which owns the franchise rights. IRD's bid to liquidate Lovett & Sons Limited will be heard at the High Court in Auckland on Friday, according to a public notice from the tax department.

BusinessDesk.co.nz

Comments from our readers

No comments yet