MARKET CLOSE: NZ shares rise; Spark, Freightways gain

Monday 17th August 2015

New Zealand share rose, snapping seven consecutive days of declines, on optimism the earnings season is relatively strong. Spark New Zealand lead gainers and Freightways advanced after reporting stronger profit.

The S&P/NZX 50 Index rose 31.35 points, or 0.6 percent, to 5727.8. Within the index, 24 stocks rose, 20 fell and six were unchanged. Turnover was $116 million.

The benchmark rose for the first time since Wednesday August 5, as investors returned to the market as financial reporting season got underway. Spark, formerly Telecom, rebounded from a two-month low, to be the best performer on the day up 4.3 percent to $2.775. The telecommunications firm is due to report annual profit of $356 million, up 7 percent from a year earlier, this Friday.

"We've had a rebound here as reporting season is getting underway," said Grant Williamson, director at Hamilton Hindin Greene. "Spark has been under a fair bit of pressure under recent times. Pretty much bargain hunters coming back into the stock after a period of weakness."

"The market has done pretty well it's still holding up quite well, so there are reasonable expectations that most of our companies are going to report pretty reasonable results," Williamson said.

Meanwhile, Freightways advanced 1.8 percent to $5.65. The courier and logistics firm, which is seen as a bellweather for the kiwi economy, Williamson said, reported a 4 percent lift in annual profit to $43.3 million but warned New Zealand’s faltering economy is likely to see growth slow in the next financial year.

"A good result still showing some reasonable growth," Williamson said. "They're a little bit more cautious going forward which is an indicator that most are aware that there's a bit of a slowdown in the local economy but still forecasting a bit of growth - so all in all not that bad."

Contact Energy rose 1.6 percent to $5.24. The utility company will look back on a "disappointing" financial performance in the year ended June 30 and see it as a transitional period, chief executive Dennis Barnes said as the company posted a 43 percent decline in net profit to $133 million and a 29 percent drop in underlying earnings, its preferred measure, to $161 million.

Tower rose 0.5 percent to $2.15. The general insurer said departing chief executive David Hancock will get a long-term incentive payment of $500,000, as well as a short-term incentive payment.

Metro Performance Glass was the worst performer on the day, down 2.9 percent to $1.32. The regulatory arm of the stock market operator, NZXR, queried the glass manufacturer's sharp share price decline, after the stock fell 17 percent, or 27 cents between August 3 and today. Metroglass confirmed it continues to comply with continuous disclosure and couldn't explain the drop in share price.

BusinessDesk.co.nz

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