MARKET CLOSE: NZ shares extend gains to new record; Kathmandu, F&P Healthcare rise

Wednesday 9th March 2016

New Zealand shares hit a record for the fifth consecutive trading session as the weak kiwi dollar lifted sentiment for companies making sales offshore. Kathmandu Holdings and Fisher & Paykel Healthcare rose.

The S&P/NZX 50 Index gained 10.5 points, or 0.2 percent, to 6,457.25. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover was $192 million.

Despite falling in intraday trading, the market ended on a positive note, although today's "pretty flat performance" was not helped by the lack of leads from overseas, said Grant Williamson, director at Hamilton Hindin Greene.

The New Zealand dollar fell to 67.19 US cents against the greenback from 67.69 cents yesterday, amid expectations tomorrow's Reserve Bank monetary policy statement will include a lower track for short-term interest rates and comment that the kiwi dollar is higher than warranted given weak commodity prices and moderate domestic economic growth.

Kathmandu led the index, up 3.2 percent to $1.61, a one-month high for the retailer which is now trading at the same price as it began the year.

Dual-listed banks gained as the S&P/ASX 200 rose 0.8 percent at 5.30pm Wellington time, with Australia & New Zealand Banking Group climbing 2.9 percent to $28.10 and Westpac Banking Corp rising 1.8 percent to $35.70.

F&P Healthcare rose 2.3 percent to $9.05.

"It's probably on the back of the weakness in the kiwi dollar," Williamson said. "The obvious weakness in the dairy sector is putting weakness into the dollar, but that is assisting a number of our export companies."

Fonterra Shareholders Fund dropped 2.5 percent to $5.75. Williamson said there was "a bit of negativity flowing through media at the moment" with respect to the dairy sector and there was pressure on Fonterra Cooperative Group's management to improve the situation for their farmer clients. Yesterday, the group cut its forecast payout to farmers for a second time this year, blaming Europe's continuing supply for depressing global prices. Units in the fund provide investors exposure to Fonterra's earnings stream and typically benefits from a reduction in the farmgate milk price, the key input to the cooperative's production.

Meanwhile, retirement home operator Summerset Group advanced 1.7 percent to $4.15 while Trade Me Group increased 1.6 percent to $4.36.

Stocks to fall included Auckland International Airport, down 2.4 percent to $6.73 and Port of Tauranga dropped 1.1 percent to $18.70.

Stocks going ex-dividend included Skellerup, which closed at $1.29 as it gave up rights to its final dividend of 3.5 cents per share, while New Zealand Refining Co closing at $3.29, with its final dividend of 20 cents per share payable on March 24. Vital Healthcare was unchanged at $2.05, despite giving up rights to its interim dividend of 2.025 cents per share. The stock has risen 9.6 percent so far this year.

BusinessDesk.co.nz

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