MARKET CLOSE: NZ shares gain, A2 Milk rises on index hopes, Pushpay up while Heartland drops

Monday 12th March 2018

New Zealand shares gained, led higher by A2 Milk Co on index inclusion speculation, with Pushpay and Kathmandu Holdings up.

The S&P/NZX50 Index rose 62.07 points, or 0.7 percent, to 8,452.08. Within the index, 33 stocks rose, nine fell and eight were unchanged. Turnover was $96.9 million.

The index was pulled higher by A2 Milk Co, which rose 4.7 percent to $13.89. Matt Goodson, managing director at Salt Funds Management, said the stock had gained due to its potential index inclusion on an MSCI index in the future, possibly replacing one of the existing New Zealand names.

Goodson said investors more generally were trying to position themselves ahead of index changes due on Friday, both on the local benchmark and Australia's S&P/ASX 200 index, as well as MSCI index changes, which can be harder to predict.

Pushpay Holdings rose 2.8 percent to $4.10, Trustpower gained 2.2 percent to $5.50, and Kathmandu Holdings rose 2.2 percent to $2.33.

Metro Performance Glass was unchanged at 80 cents. On Friday, it was announced that the stock will leave the S&P/NZX 50 Index in its March rebalancing, due to take place this coming Friday. The stock will be replaced by Gentrack Group, which gained 6.4 percent to $6.80 today.

"It was well-known that Metro Glass would be exiting, it's not a surprise at all and it has no fundamental impact on the business," Goodson said. "Gentrack was also expected, and it creates forced passive demand for the stock."

Heartland Bank was the worst performer, dropping 2.7 percent to $1.81, while Z Energy fell 1.2 percent to $6.85.

Arvida Group dipped 0.8 percent, or 1 cent, to $1.20. It gave up rights to a 1.55 cent interim dividend and said it's on track to complete 94 new units in the second half and has "strong relationships" with its development partners, including the beleaguered Fletcher Construction.

Outside the benchmark index, Briscoe Group was unchanged at $3.67. It coped with a margin squeeze in the latest financial year to deliver a new record profit of $61.3 million as sales growth continued to underpin earnings. Sales rose 3.5 percent to $603.1 million, offsetting a contraction in gross margin to 40.49 percent from 41.07 percent a year earlier.

"It was quite a solid result, despite a few headwinds in the period," Goodson said.

Trilogy International dipped 0.7 percent to $2.82. It has warned annual earnings may fall short of official guidance after a volatile quarter for its Ecoya scented candles and uncertainty as to the timing of some Lanocorp beauty products orders.

(BusinessDesk)

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