Friday 14 October 2016 05:30 PM
MARKET CLOSE: NZ shares rise, Summerset, Air NZ and Steel & Tube gain
By Sophie Boot
Oct. 14 (BusinessDesk) - New Zealand shares rose slightly, led by Summerset Group Holdings and Air New Zealand, while
Steel & Tube Holdings also gained.
The S/NZX50 Index rose 13.21 points, or 0.2 percent, to 7,133.26. Within the index, 26 stocks rose, 16 fell and eight were
unchanged. Turnover was $111 million.
"We are a touch firmer but overall it hasn't been a very good week for the market," said Grant Williamson, director at
Hamilton Hindin Greene. "The market still seems to be under a bit of selling pressure, but we have seen a rebound in
certain stocks that have been sold off in recent times. It's a bit of a mixed bag, we've pretty much followed
Air New Zealand gained 1.8 percent to $1.745, bouncing off yesterday's two-year low.
"It's been hit very hard with investors thinking increased competition and slightly higher oil prices is going to have
an impact on that company - to me, it looks like that's been a little bit overdone," Williamson said. "In the past few
weeks we've seen some foreign selling in our market, and we're starting to see the end of that."
The local index has dropped 3.1 percent this month as investors have grown increasingly wary about the US Federal
Reserve hiking that country's interest rates, which would make the yields of New Zealand listed companies less
attractive by comparison. However, the index is still up 12.6 percent this year.
"I think investors are a little bit nervous with what's happening overseas. We've had some small selloffs in the
American market, and I think investors are being a bit cautious at the moment," Williamson said. "This correction is
relatively healthy, we've had two other corrections of a similar size this year. At this stage the market is still in an
up trend but we'll just have to see whether buyers can get back in control at some point."
Summerset Group led the index, up 1.9 percent to $4.86. Contact Energy gained 1.7 percent to $4.90 and Xero rose 1.7
percent to $17.89.
New Zealand Refining Co was the worst performer, down 2.5 percent to $2.34, while Auckland International Airport dropped
1.8 percent to $6.62, Tower fell 1.6 percent to 90.5 cents and Trade Me Group shed 1.5 percent to $5.24.
Outside the benchmark index, Steel & Tube Holdings advanced 3.3 percent to $2.22. It will buy Composite Floor Decks, which supplies and installs composite
floor decking, for $13.3 million, with a further $3 million possible based on its performance over the next two years.
Steel & Tube was a member of the S/NZX50 benchmark index until September, and dropped out after the value of its shares hit their lowest level since 2001
in June at $1.79 following a difficult few months.
Scott Technology gained 4.8 percent to $2.20. Yesterday, it reported a record $11 million in full-year pre-tax profits,
benefitting from rising interest globally in automation as companies seek to reduce costs and boost productivity.
"It came out with a very good result yesterday, they've had a nice rally over the past few months and this is the
highest level they've been in a couple of years," Williamson said.
Michael Hill International rose 3 percent to $1.74. The Hill family trust has sold down a tenth of its stake in Michael
Hill International, in a move its founder and namesake Michael Hill says will enhance the stock's liquidity following
its listing on the Australian stock exchange.
The trust, Hoglett Hamlet, sold 16 million shares to a number of unrelated parties for A$25.6 million. It had owned
164.3 million shares, or 42.9 percent of the jewellery chain, and now holds 38.9 percent.