MARKET CLOSE: NZX 50 charts new record; Comvita leads, Spark, Port of Tauranga gain
By Jonathan Underhill
Oct. 19 (BusinessDesk) - New Zealand shares rose, nudging the S/NZX 50 Index to a new record, as Comvita continued to benefit from yesterday's earnings upgrade and Port of Tauranga
said first-quarter volumes pointed to stronger annual profit in 2018.
The NZX 50 gained 9.05 points, or 0.1 percent, to 8124.04. Within the index, 21 stocks rose, 19 fell and 10 were
unchanged. Turnover was $152 million.
Comvita rose 3.4 percent to $7.85, adding to its gain yesterday after the Te Puke-based company raised its 2018 earnings
guidance on a recovery in "grey channel" sales to China and improved North American sales. That gave it the confidence
to expect to resume dividend payments in the current financial year, it told shareholders at their annual meeting
yesterday.
"It's a nice healthy bounce but they are going to have to earn back their stripes after a number of downgrades," said
David Price, a broker at Forsyth Barr. He said one key risk for the honey products company was the weather and he noted
a recent Niwa forecast was for more rainfall than usual (which bees dislike).
The benchmark index has gained about 18 percent this year and Price said the global outlook still favours equities over
asset classes. That included improving investor appetite for risk, a better outlook for global economic growth and not
enough inflation to provoke sharp increases in interest rates. Added to that, some 80 percent of US companies that have
reported their earnings met or beat expectations, he said.
Spark New Zealand rose 3 percent to $3.76 and Australia & New Zealand Banking Group gained 1.1 percent to $33.72.
Port of Tauranga advanced 1.6 percent to $4.46. Chief executive Mark Cairns told shareholders at their annual meeting in
Tauranga today that after a strong first quarter New Zealand's biggest port company expects full-year earnings to be $88
million-to-$92 million, up from $83.4 million in 2017. "We expect cargo and earnings growth to continue" and "we still
have ample headroom to handle increasing volumes," Cairns said.
Scales Corp rose 0.5 percent to $3.75 after the Ministry for Primary Industries released its quarterly outlook, showing
the government department anticipates exports to rise 9.2 percent in the June 2018 year. PGG Wrightson was unchanged at
58 cents.
Sky Network Television slipped 0.4 percent to $2.79 after the pay-TV operator reiterated its falling subscriber numbers
at today’s annual meeting. Chair Peter Marcourt, who was re-elected to the board, told shareholders that directors are
considering the trading performance and outlook on a regular basis to weigh up how quickly debt should be reduced and
dividends paid.
SkyCity Entertainment Group rose 0.3 percent to $3.81 ahead of tomorrow’s annual meeting. The hotel and casino operator
reported a marginal lift in annual earnings for the 2017 year, which led to predictions the stock would be downgraded by
analysts. It’s still rated an average ‘hold’ in nine recommendations compiled by Reuters.
Restaurant Brands New Zealand was the worst performer on the day, falling 1.9 percent to $6.87 after the fast-food
operator reported a 41 percent increase in first-half profit, benefitting from recent expansion into Australia and
Hawaii.
Outside the benchmark index, Fliways Group rose 3.9 percent to $1.08 after chief executive Duncan Hawkesby delivered an
upbeat outlook for the transport company to shareholders at today’s annual meeting, saying revenue across its three
divisions was tracking ahead of a year earlier.
New Zealand Oil & Gas fell 0.7 percent to 76.5 cents after ASX-listed Zeta Resources said it’s partial takeover bid failed and it would
let the offer lapse, paving the way for investors to accept a sweeter bid from OG Oil & Gas. The Cushing family’s H vehicle, which had entered into a lock-up deal with Zeta, will sell part of 9.2 percent stake to OGOG.
Veritas Investments sank 23 percent to 6.2 cents after the food and beverage investor was censured and fined by NZX
Regulation after taking it’s time to tell the market of its commitment to sell or close the Nosh supermarket chain as a
condition of continued support from its bank.
(BusinessDesk)