MARKET CLOSE: NZ shares surge to record

Published: Wed 29 Aug 2018 08:57 PM
MARKET CLOSE: NZ shares surge to record as market reopens; Synlait, a2 gain
By Sophie Boot
Aug. 29 (BusinessDesk) - New Zealand shares surged to a record as the market reopened after yesterday's platform failure. Synlait Milk and A2 Milk Co led the gains.
The S/NZX50 Index gained 148.65 points, or 1.6 percent, to 9,362.67. Within the index, 35 stocks rose, 8 dropped and 7 were unchanged. Turnover was $216.8 million.
Yesterday the local market was suspended for most of the day due to system faults. NZX is investigating the cause, which it aims to have completed within a week.
"I don't know if there's a bit of pent-up buying from yesterday, but it's having a stellar day," said Robert Garden, investment adviser at Craigs Investment Partners. "There's nothing specific about it though. A lot of the bigger market cap stocks are having a good run today.
"It's a bit of continuation on the recent momentum the market has had through reporting season, with interest rates looking to stay lower and our dollar falling away probably boosting some of the export stocks," Garden said
Synlait led the index, up 5.2 percent to $13.15, while a2 rose 4.4 percent to $12.93. Garden said sentiment had improved after ASX-listed Bellamy's Organic, which sells infant formula and food, today reported a A$43 million net profit for 2018, turning from a loss in the previous year.
"It was a reasonable result. In terms of infant formula and baby products through to China they've had a reasonable recovery. There's just a bit more confidence coming back into the market and looking at some of those stocks like Synlait and a2 that have been sold off in more recent times," Garden said.
Summerset Group Holdings rose 4.5 percent to $7.90, Fletcher Building gained 3.5 percent to $6.57, and Westpac Banking Corp advanced 3.1 percent to $31.20.
Contact Energy was the worst performer as it gave up rights to a 19 cent final dividend, dropping 3.1 percent or 18 cents to $5.60.
Genesis Energy dropped 2 percent to $2.515. It reported an 8 percent increase in full-year operating earnings to $360.5 million after dry, still weather boosted demand for coal- and gas-fired generation from its Huntly site. The company invested $80 million last year, including upgrades at Tekapo, Tuai and Tokaanu, integrating the new LPG business and new digital retail products.
"Without the acquisitions they made through the year, the rest of the group was down $15 million in terms of earnings," Garden said. "It's had a reasonably strong run until the last few days. Coming back to interest rates, there's going to be support in terms of the dividend on it."
Sky Network Television dropped 1.2 percent to $2.40 and Z Energy fell 0.7 percent to $7.22.
Outside the benchmark index, Vista Group International rose 3.5 percent to $4.16. It expects to maintain sales momentum through the rest of the year as the acquisition of a Latin American cinema analytics reseller helped boost first-half profit 36 percent to $5.2 million.
The Auckland-based cinema software developer lifted first-half revenue 20 percent to $60.1 million and said it expects to maintain that pace of expansion through the rest of calendar 2018. If it does achieve 20 percent or more revenue growth for a fifth straight year, that take annual sales to $127.9 million. That's more than four times Vista's revenue in 2013, before it went public.
"Good revenue growth and good cash generation from the businesses as well. They probably needed to come out with decent numbers given the stock has run pretty hard since April. It's more or less met the relatively optimistic expectations of the market," Garden said.
Methven rose 3.9 percent to $1.08. The tapware designer lifted annual profit 22 percent as it earned more from international sales while New Zealand weakened. It expects better domestic growth in 2019.
Steel & Tube Holdings rose 3.5 percent to $1.20. It says improving sales have continued into the current financial year and it expects to resume dividends as its business overhaul begins to pay off. The company reiterated its loss on an earnings before interest and tax basis was $36.2 million in the year ended June 30 while normalised ebit was $16.5 million.
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk

Next in Business, Science, and Tech

Government moves to protect elite soils
By: New Zealand Government
Calls for overhaul of gene-technology regulations
By: Royal Society Te Aparangi
Card spending dips in July
By: BusinessDesk
Govt takes more action to reduce waste
By: New Zealand Government
Fonterra Provides Update on Earnings
By: Fonterra
Potatoes vs people: govt moves to protect top vege-growing
By: BusinessDesk
New Zealand First Backs Plans to Protect Productive Land
By: New Zealand First Party
LGNZ cautious as government pits potatoes against houses
By: Local Government NZ
HortNZ welcomes safeguarding of country’s best growing soils
By: Horticulture NZ
Anti-housing rules to keep Kiwis locked out
By: New Zealand Taxpayers' Union
Productive farming land dug up for housing
Gene editing regulations – Expert Reaction
By: Science Media Centre
Government responds to report on gene editing
By: New Zealand Government
Government can’t continue to ignore biotech
By: New Zealand National Party
Genetic Regulation Overhaul Overdue
By: New Zealand Life Sciences Network
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media