MARKET CLOSE: NZ stocks rise to three-year high

MARKET CLOSE: NZ stocks rise to three year high; NZX leads gainers, Wrightson falls

By Jason Krupp

May 20 (BusinessDesk) - New Zealand stocks rose to a fresh three-year high, with NZX Ltd. leading gainers amid investor anticipation of increased equity flows after the government signalled it was looking to sell stakes in state owned enterprises to return its finances to surplus. PGG Wrightson Ltd. fell.

The NZX 50 Index rose 8.44 points, or 0.2%, to 3,577.44, its fifth gain in a row. Within the index, 29 stocks rose, 12 fell, and nine were unchanged. Turnover was $113.6 million.

NZX, the securities market operator, rose 3.7% to an 18-month high of $2.51.

The government said yesterday it favours initial public offerings to sell down its holdings in Meridian Energy, Genesis Energy, Mighty River Power, coal miner Solid Energy and more of its stake in carrier Air New Zealand Ltd. in a bid to raise between $5 billion and $7 billion.

"The market is starting to re-evaluate the stock, certainly in anticipation of the flows from government's sale of stakes in SOEs and Air New Zealand, but also in terms of some of the revenue streams they have maturing in the medium term," said Alan Moore, who helps manage $600 million in equities for Milford Asset Management Ltd. "If those come off it will be quite attractive."

Ryman Healthcare Ltd., the retirement village operator, rose 3% to a fresh historic high of $2.76, with the stock continuing to gain after it yesterday reported at 28% jump in full-year earnings.

Net profit rose to $100.2 million, or 20.1 cents a share, in the 12 months ended March 31, up from $78.4 million, or 16.8 cents, a year earlier.

The increase came from an 18% lift in revenue to $129.7 million, made up from a 17% boost in care fees to $105.8 million and a 26% gain in management fees to $23.3 million.

Cavalier Corp., the listed carpet maker, rose 2.9% to $3.90.

Argosy Property Trust, the listed property investor being courted by DNZ Property Fund Ltd. on a possible merger, rose 1.2% to 86 cents.

DNZ this week said a merger between the two could reap as much as $5 million in cost savings for investors, although it has not formally tabled an offer with Argosy. DNZ shares were unchanged at $1.31.

Xero Ltd., the cloud-based accounting platform provider, rose 0.8% to $2.50 after it reported a narrower loss in the year ended March, as its trans-Tasman units underpinned a surge in sales.

The Wellington-based company reported a loss of $7.5 million, or 8 cents per share, in the 12 months ended March 31, compared to a loss of $8.5 million, or 10 cents, a year earlier.

Wrightson, the rural services company recently taken over by Chinese seed researcher Agria Corp., fell 5.7% to 50 cents, leading decliners on the bourse. The stock is rated as ‘outperform’ according to a consensus view of three analysts compiled by Reuters.

Fisher & Paykel Appliances Holdings, the whiteware maker, fell 2.6% to 56 cents, with the strength of the New Zealand dollar continuing to weigh on the company. FPA earns more than 70% of its revenue in U.S. dollars.

Telecom Corp., the country's biggest phone company, fell 1.1% to $2.30.

Comvita Ltd., the honey products manufacturer, fell 0.6% to $1.79 after it reported a 90% decline in profit to $503,000 for the year ending March 31, largely reflecting the costs of an ongoing intellectual property battle in the U.K. Sales in the period came in at $82 million, down from $84.9 million previously.

Kingfish Ltd., the listed investment company focusing on local equities, was unchanged at $1.02 after it reported a dramatic slowdown in earnings in the year to March 31, even as total value continued to accrue.

The Kingfish portfolio dropped both real dividend income and capital gains during the year, compared to the previous year, but the $9.4 million profit was a long way off last year’s $24.4 million, thanks to a much smaller gain in the fair value of unrealised investments.

Pyne Gould Corp., the financial services company, was unchanged at 29 cents after it announced the High Court has approved the distribution of its Building Society Holdings stake to shareholders, clearing the last regulatory step in the merger of its Marac Finance unit with the Southern Cross and Canterbury building societies.

(BusinessDesk)

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