MARKET CLOSE: NZ shares rise as Brexit fears ease; A2 Milk gains, Warehouse falls

Monday 20th June 2016

New Zealand shares rose as Brexit fears eased, though trading remained light with investors waiting to see the result later this week. Mainfreight and A2 Milk gained, while Warehouse Group dropped.

The S&P/NZX 50 Index rose 22.46 points, or 0.3 percent, to 6,869.53. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $120.8 million.

Brexit fears appear to have eased slightly, with some polls over the weekend indicating more Britons would prefer to remain in the European Union, but a volatile week is still expected leading into the vote, with results due around 10am Friday local time.

"It's a very big macro week for markets to deal with, and while markets are finding a firmer footing it will take a while to wash through," said Shane Solly, director at Harbour Asset Management. "We still face some volatility as the week goes on - we will be the first market to open, we will be in the heat of it all."

Mainfreight was the biggest gainer, up 3.9 percent to $16.62. It sank 3.6 percent to $16 on Friday, and has bounced back today, Solly said.

A2 Milk rose 3.5 percent to $1.77. Last Wednesday the milk marketing company raised its full-year guidance and said it is well placed to cope with changes to infant formula regulations in China, and has gained 12.7 percent since then, though is still short of its $2.10 highs from February this year. Solly said the share price had not reacted much to the positive result announcement " so it's having a bit of a catch-up there."

Property for Industry advanced 3.6 percent to $1.57 while Vital Healthcare Property Trust gained 2.3 percent to $2.22.

Both dual-listed banks gained, with Westpac Banking Corp up 2.1 percent to $30.64 while Australia & New Zealand Banking Group rose 1.8 percent to $24.95. Australia's ASX200 was up 1.5 percent at 5:30 New Zealand time.

Warehouse Group was the worst performer, down 3.2 percent to $2.76. James Pascoe, the retail group owned by David and Anne Norman, lifted its holding in Warehouse Group to 17.5 percent buying shares on-market last week. Pascoe's retail interests include owns Farmers, Whitcoulls, Pascoes, Stevens, Stewart Dawsons and Goldmark.

"There's no doubt there has been some mixed thinking about retailers in general over the winter - it hasn't been as cold as some would have thought, and that will have some modest impact potentially on the Warehouse," Solly said. Still, "Pascoe is a very savvy retail group."

Outside the main index, APN News & Media was unchanged at $4.76 even after its trading halt was lifted. The Sydney-based company was in a halt before it announced it had received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations.

Wynyard Group gained 7.8 percent to 69 cents. Two fund managers are seeking support for a class action by Wynyard shareholders to recover losses since the share price has plunged following a disappointing annual result and a heavily discounted rights issue to raise cash.

At the listed software company's annual meeting today, the revamped board said a restructure of the business into two units and tight control on costs should see a turnaround on the disappointing 2015 performance which saw the share price tank 60 percent in the past year.

BusinessDesk.co.nz

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