Market commentary

WELLINGTON: New Zealand shares rose as Contact Energy’s firsthalf earnings delivered a betterthanexpected dividend, giving investors something to cheer about at the start of the domestic reporting season. Restaurant Brands New Zealand led the market higher.

The S&P/NZX 50 index gained 33.39 points, or 0.4%, to 9210. Within the index, 28 stocks rose, 13 fell and nine were unchanged. Turnover was $92.3 million, and just four companies traded on volumes of more than a million shares.

Investors have set a relatively low bar for the local reporting season, predicting singledigit earnings growth across the majority of firms posting results. Dividends remain a key factor for investors as swap rates trade near record lows in an environment where the Australian and New Zealand central banks are considering cutting their benchmark rates to new lows.

Contact rose 1.6% to a fouryear high $6.32 after reporting a 28% gain in earnings before interest, tax, depreciation, amortisation, and changes in financial instruments as its generation arm benefited from higher wholesale electricity prices. Without major capital spending programmes, the electricity retailergenerators are able to pay out all of their operating cash. That boosted the attraction of other utilities and property stocks, which typically provide steady cash returns to investors.

Genesis Energy rose 1.1% to $2.69 on a biggerthanaverage volume of 551,000. Kiwi Property Group increased 1.1% to $1.45 with 1.4 million shares changing hands. Goodman Property Trust gained 0.9% at $1.62 on a volume of 238,000, about half its 90day average.

Trustpower increased 0.2% to $6.30 on light volume, after warning it may have to write down the value of its generation assets after revising its future electricity price expectations. Controlling shareholder Infratil rose 1% to $3.95 with 932,000 shares traded, more than twice its threemonth average.

Spark New Zealand was the most traded stock on a volume of 2.7 million, below its 3.5 million average. It fell 0.6% to $4.025. A2 Milk rose 2.4% to $13.40 on a volume of 1.2 million, while Vital Healthcare Property Trust increased 0.2% to $2.095 on a volume of 1.1 million, almost five times its 90day average.

Restaurant Brands led the market higher, up 2.8% at $8.84 on very light volume. Briscoe Group rose 2.8% to $3.33 after reporting a 5.8% increase in fourthquarter sales. Rival Warehouse Group fell 0.5% to $2.06.

Pennydreadful Promisia Integrative halved in value, dropping to 0.1c after saying the Ministry of Health has accused it of misselling its Arthrem product.

Ryman Healthcare was the worst performer on the benchmark index, down 2.9% at $10.70 on a volume of 174,000, less than a third of its average the past three months. Tourism Holdings was down 1.9% at $4.60 on a volume of 234,000 shares, more than its 148,000 average.

The Australian sharemarket closed modestly in the red yesterday as gains from miners could not outweigh losses from the financial sector.

The benchmark S&P/ASX200 index closed down 10.7 points, or 0.18%, at 6060.8 points, while the broader All Ordinaries was down 7.6 points, or 0.12%, at 6128.6. — BusinessDesk/AAP