MARKET CLOSE: NZ stocks rise; Metro Glass gains, Sky TV drops

Friday 23rd October 2015

New Zealand shares rose for a 10th straight day, propelling the benchmark S&P/NZX 50 Index to a record high, as investors regain confidence following volatility over the past couple of months.

The S&P/NZX 50 Index rose 47.06 points, or 0.8 percent, to 5,970.660. Within the index, 39 stocks rose, seven fell and four were unchanged. Turnover was $139 million.

New Zealand joined other Asian sharemarkets in posting gains today, extending a global stock rally after the European Central Bank signalled it's ready to add more stimulus to boost growth. Higher yielding stocks and growth companies benefited.

"It was another very good day on the local market," said Grant Williamson, a director at Hamilton Hindin Greene. "It's a recovery from a pretty disappointing September quarter, volatility has died right down in those international markets. That (volatility) always worries local investors. They have regained confidence now that those offshore markets have settled down somewhat - investors are just coming back in. The prospect of another interest rate cut at some stage is boosting the high-yielding sharemarket."

Williamson said investors were chasing higher yielding stocks in the electricity sector.

TrustPower advanced 2.5 percent to $7.86, MightyRiverPower gained 1.3 percent to $2.76, and Genesis Energy rose 0.8 percent to $1.895.

Growth stocks such as retirement village companies also advanced as investors seeking a more diversified portfolio returned to the market, Williamson said.

Summerset Group gained 0.8 percent to $4.01, Metlifecare advanced 0.9 percent to $4.44, and Ryman Healthcare gained 1.4 percent to $7.98.

Infratil, which is exposed to both the energy and aged care sector, increased 1.8 percent to $3.15.

Meanwhile, pay television company Sky Network Television was the worst performer on the benchmark index, down 2.4 percent to $4.57. New Zealand's dominant pay-TV company said this week it expects profit will fall as much as 11 percent in the 2016 financial year, with largely flat revenue and increased capital expenditure. The company is battling to retain customers against the rise of on-demand streaming services, such as US content provider Netflix.

"Sky TV had a shocking week," said Williamson. "That just shows the competition that is mounting against that company is starting to frighten investors somewhat."

Metro Performance Glass, the largest glass supplier in New Zealand, was the best performer on the benchmark index, climbing 3.2 percent to a three-month high of $1.61. The company is likely to hike prices 4.5 percent from January to help offset the increased cost of imported raw materials caused by a decline in the local currency, brokerage First NZ Capital said in a note where it reiterated its 'outperform' rating on the stock.

Vital Healthcare Property Trust, the listed hospital owner and developer, jumped 1.7 percent to a record $1.76 after it said it had bought two parcels of land which it plans to develop to expand Lingard Private Hospital and Toronto Private Hospital, both in New South Wales, Australia.

It is also annual meeting season, with a number of companies telling shareholders their outlook for the coming year.

Outside the benchmark, Fliway, the transport and logistics group that listed in April, reaffirmed prospectus earnings guidance at its annual meeting but warned it’s likely to undershoot on revenue for the second time. The company's shares were unchanged at $1.01.

Marsden Maritime Holdings, which owns half of the Marsden Point-based Northport along with a marina, commercial facilities and land, told its annual meeting to expect trade volumes through the port to be little changed for a second year following a levelling out of log exports. The shares advanced 1.8 percent to $2.85.

Augusta Capital's shares dropped 1 percent to 95 cents after the property investor and fund manager said the proposed buyer of its Auckland Finance Centre property had abandoned the deal, depriving the listed property investor and fund manager of $87 million from the planned sale.

BusinessDesk.co.nz

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