MARKET CLOSE: NZ shares rise as blue chips rally into holiday period; Spark gains

Thursday 20th December 2018

New Zealand shares rose as investors sought out blue-chip stocks, such as Spark New Zealand and SkyCity Entertainment Group, before heading into the holiday period.

The S&P/NZX 50 index increased 10 points, or 0.1 percent, to 8,772.19. Within the index, 21 stocks gained, 24 fell and five were unchanged. Turnover was $146.8 million.

Blue-chip stocks led the market higher, with a number acknowledging the appearance of global exchange-traded fund manager Vanguard as a substantial shareholder this week. Trading is expected to thin out ahead of the holiday period, where abbreviated trading and shortened weeks typically support what's called a 'Santa rally'.

Bryon Burke, head of equities dealers at Craigs Investment Partners, said New Zealand outperformed markets in Asia Pacific today and is the best performing benchmark index across the region this year, up 4.5 percent so far.

"That's borne out by our overall yearly performance to date, which looks like it is going to hold firm with a positive return while most other markets are going to be negative for the calendar year," Burke said.

"We have seen a bit of buying today, general retail buying. It may be just a little bit of end-of-the-year, December, tidy up as people finish off some allocations of cash they have been sitting on."

SkyCity led the market higher, up 2.9 percent at $3.54 in lighter than usual trading. Spark rose 2.5 percent to $4.28 on a volume of 4.3 million shares, the most active stock on the market today. Auckland International Airport gained 2.1 percent to $7.30 on 2.1 million shares and Meridian Energy was up 1.9 percent at $3.47 on a volume of 2 million.

Burke said the local market also may have got a boost from ANZ Bank New Zealand economists predicting lower interest rates in coming years after weaker than expected economic growth. Low interest rates boost the attraction of returns from equities and easier credit often supports company earnings.

"One would assume by nature if you were going to cut interest rates that would be positive for the market," Burke said.

Trade Me increased 0.2 percent to $6.31 on a volume of 3.2 million. The online marketplace faces a takeover bid from UK private equity firm Apax Partners at $6.45 a share.

Of other companies trading on volumes of more than 1 million shares, A2 Milk was unchanged at $10.75, Z Energy fell 0.4 percent to $5.65, Fletcher Building declined 0.8 percent to $4.81, and Air New Zealand increased 0.3 percent to $3.20.

Vital Healthcare Property Trust increased 0.5 percent to $2.07 after a number of investors aired grievances at its annual meeting over the property trust's management contract. Non-binding resolutions put forward by rebel investors look likely to be voted down, although a final count isn't expected until tomorrow.

Sky Network Television dropped 7.4 percent to $2 after Spark announced it had picked up the distribution rights to several sports, including NBA TV.

Kiwi Property Group fell 2.5 percent to $1.35 after the real estate investor said it bought a $25 million industrial site near its Sylvia Park mall.

Outside the benchmark index, Rakon was unchanged at 30 cents after forecasting annual operating earnings to rise as much as 16 percent.

Abano Healthcare Group slipped 0.5 percent to $6.47 after reporting flat first-half profit as dental acquisitions offset a margin squeeze.

Smiths City Group rose 5.8 percent to 27.5 cents after reporting an increase in first-half earnings as it continues to reinvest back into the business to bring its infrastructure up to scratch.

PGG Wrightson dropped 4.1 percent to a two-year low 47 cents. The Overseas Investment Office today said it's cut a deal with cornerstone shareholder Agria over 'good character' investment hurdles. That included the firm reducing its holding below 50.2 percent, which has happened, and a penalty yet to be ordered by the High Court, where papers have been lodged.

(BusinessDesk)

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