Market commentary
AUCKLAND: New Zealand shares rose as earnings season continued to deliver mixed results. NZX was among gainers on the day after delivering a special dividend while Heartland Bank fell on its increased bad debt provisioning.
The S&P/NZX 50 index increased 15.55 points, or 0.2%, to 8987.49. Within the index, 26 stocks gained, 19 fell, and five were unchanged. Turnover was $111.7 million.
Company reporting season continued with NZX declaring a special dividend from the sale of noncore assets. Chief executive Mark Peterson was also upbeat about how far the stock market operator has come in its fiveyear transformation plan. The shares rose 1.8% to $1.11.
Heartland Bank reported an 11% increase in net profit, driven by growth from its reverse mortgage business, and said it will target doubledigit earnings growth again for the 2019 year. Still, the stock fell 1.7% to $1.71 as the bank increased provisioning for bad debts.
Shane Solly, a portfolio manager at Harbour Asset Management, said some parts of the market are fullypriced. That means earnings results need to be good to lift share prices. That has added to volatility in markets, especially in Australia.
‘‘It’s very modest turnover whether it’s New Zealand or Australia — investors are very much reading the entrails of results,’’ he said. NZX’s result was ‘‘better than people were expecting’’ while Heartland’s ‘‘provisioning was slightly higher than expected’’.
Among companies reporting today, Skellerup Holdings fell 1.6% to $2.01. Precinct Properties New Zealand was unchanged at $1.39.
Fonterra Shareholders’ Fund units rose 1% to $4.85 after Fonterra appointed Miles Hurrell interim CEO effective immediately, accelerating the departure of Theo Spierings who will linger for a month to aid the transition. The dairy cooperative will report earnings next month, which will be at the bottom end or slightly below guidance as margins were squeezed across the wider group.
Synlait Milk rose 3.6% to $11.19, leading the benchmark index higher. a2 Milk Co fell 1.3% to $1.30.
Infratil rose 0.9% to $3.42 and Mercury NZ fell 0.6% after the companies mounted a takeover offer for wind farm operator and developer Tilt Renewables at $2.30 a share. Infratil already holds a controlling stake in Tilt, having overseen the demerger from Trustpower in 2016, and Mr Solly said the partners understand the sector. Tilt shares gained 6.6% to $2.27.
Wellington Drive Technologies gained 5.7% to 18.5c after saying firsthalf profit rose 18% on burgeoning demand for its InternetofThings products.
NZAXlisted Cooks Global Foods was unchanged at 7.5c after announcing a conditional purchase of Wellington cof fee chain Mojo Coffee Cartel for $19 million in cash, scrip and debt. That is more than half Cooks’ current market value.
Sky Network Television posted the biggest decline on the NZX 50 yesterday, falling 2% to $2.52. Telecommunications firm Spark New Zealand expanded its foray into premium sports content on Tuesday by buying the rights for the English Premier League in 2019. Spark shares rose 1.2% to $3.895.
Among blue chip stocks, Mainfreight gained 0.5% to $27.97, Fisher & Paykel Healthcare Corp rose 0.5% to $14.86, Meridian Energy increased 0.3% to $3.135 and Auckland International Airport advanced 0.3% to $6.76.