MARKET CLOSE: NZ shares up, led by Gentrack and Port of Tauranga

Monday 7th May 2018

New Zealand shares gained, led higher by Gentrack Group and Port of Tauranga, with Westpac Banking Corp gaining on its first-half result.

The S&P/NZX50 Index rose 38.57 points, or 0.5 percent, to 8,587.94. Within the index, 31 stocks rose, 10 were unchanged and nine fell. Turnover was $92.4 million.

"It's a pretty solid day which isn't surprising - it was a good day offshore on Friday night, this part of the world has caught up to those positive leads out of the US and so forth, which all came on the back of the strong reporting season," said Mark Lister, head of private wealth research at Craigs Investment Partners.

"The market here is generally waiting around for the reporting season to get a bit busier, that will ramp up over the next couple of weeks, plus we've got the OCR and the Monetary Policy Statement this week from the Reserve Bank - people are watching that to see if the new governor means there's a change in approach."

Gentrack Group led the index higher, up 2.3 percent to $7.20. The stock has jumped 10 percent over the past fortnight, hitting a record high on May 2.

"It continues to get some good support, it has had a good run lately," Lister said. "It has just quietly stitched together quite a few good offshore deals, and seems to be growing the business quite steadily and performing well."

Port of Tauranga rose 2 percent to $5.10, Trustpower gained 1.9 percent to $5.84, and NZX advanced 1.9 percent to $1.08.

Dual-listed Westpac Banking Corp rose 1.3 percent to $31.65. The bank's New Zealand unit lifted first-half cash earnings 4 percent to $482 million as it fattened margins and cut costs with a transformation programme that's introduced greater self-service and shut down several branches. Westpac's New Zealand unit contributed around 10.4 percent of the group's A$4.25 billion total cash earnings.

New Zealand regulators are putting local bank behaviour under greater scrutiny after the Royal Commission in Australia uncovered some dubious practices, with the Reserve Bank and Financial Markets Authority demanding local lenders demonstrate how their operations differ from their Australian parents.

"It wasn't a bad result, you'd call that a win given how much pressure the sector has been under lately," Lister said. "There is going to be more and more headwinds for all the banks, life is going to get harder for them before it gets easier, so I think the short-term positives we've seen out of that result are probably overwhelmed by bigger picture challenges that aren't going away any time soon."

Fellow dual-listed bank Australia and New Zealand Banking Group, which reported last week, gained 0.5 percent to $29.54.

Chorus was the worst performer, down 1.2 percent to $4.11. Skycity Entertainment Group fell 1 percent to $3.93 and Kathmandu Holdings dropped 0.7 percent to $2.67.

Outside the benchmark index, Briscoe Group gained 1.8 percent to $3.48. The retailer's first-quarter sales rose 3.6 percent to $146.4 million with its Rebel Sport chain a swift starter in the year, outperforming the flagship homeware division.

(BusinessDesk)

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