MARKET CLOSE: NZ shares rise, rounding out 2.7% monthly gain; Ryman up, Sky TV, NZX down

Tuesday 31st October 2017

New Zealand shares rose, ending the month up 2.7 percent, led by a revival in Ryman Healthcare while Sky Network Television and NZX dropped.

The S&P/NZX 50 Index gained 2.36 points, or 0.03 percent, to 8,146.34. Within the index, 23 stocks rose, 19 fell and eight were unchanged. Turnover was $234 million.

Ryman Healthcare was the best performer, up 1.8 percent to $9.30. The stock fell as low as $8.85 a week ago amidst investor concern about the impact the new government's policies could have on house prices. Strong house price gains have driven retirement village stocks higher over recent years.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said those concerns had spooked investors but that the stock tended to bounce when it gets below $9. It is up 12.7 percent this year. Other retirement stocks were mixed, with Metlifecare unchanged at $5.78 and Summerset down 0.2 percent to $4.87 today.

Z Energy gained 1.7 percent to $7.37, Genesis Energy rose 1.7 percent to $2.45, and Tourism Holdings advanced 1.6 percent to $5.08.

Sky TV was the worst performer, down 3.1 percent to $2.50. Comvita dropped 2.7 percent to $8.51 and Chorus fell 2.3 percent to $4.015.

NZX dropped 1.7 percent to $1.18. It posted a 4.4 percent decline in third-quarter revenue to $18.5 million as a tepid environment for new listings weighed on the stock market operator's income.

Listing fees dropped 8.7 percent to $3.6 million, only just keeping its position as the Wellington-based company's biggest source of income. Market operations shrank 22 percent to $2.3 million, while the bright point for the market division was a 10 percent gain in securities information to $2.6 million on an increase in professional terminal numbers and high-value subscription products.

Outside the benchmark index, Cavalier Corp gained 11 percent to 40 cents. The struggling New Zealand carpet maker expects earnings to improve this financial year and next as it reaps the benefits from restructuring its manufacturing operations, a lower wool price and reduced debt.

Chair Sarah Haydon said uncertainty remained about the company's forecasts and the board doesn't expect to be able to give meaningful earnings guidance until after the first-half results at the earliest.

McIntyre said it was welcome news and the company may be turning a corner, "although in saying that they have turned a couple of corners over the past 12 to 18 months."

PGG Wrightson dropped 3.5 percent to 56 cents. It said earnings growth will stall this year after a wet winter and spring and it will embark on a strategic review following the appointment of new chief executive Ian Glasson.

Operating earnings before interest, tax, depreciation and amortisation for the coming year are expected to be in line with the $64.5 million reported for the year ended June 30, while net profit will fall about 30 percent, mainly reflecting one-time gains from property sales in 2017 that won't be repeated in the current financial year.

(BusinessDesk)

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