Shares rise for third day in row
Xero leads index after milestone
New Zealand shares advanced, led by Xero and Spark NZ, while NPT and Argosy Property dropped. The S&P/NZX 50 index gained 35.56 points, or 0.5 per cent, to 7169.12. Within the index, 24 stocks rose, 18 fell and eight were unchanged. Turnover was $166 million.
The local index has risen for three sessions in a row, bolstered by strong leads from international markets. Xero led the index, up 3 per cent to $19.29 after saying it reached a milestone of signing more than 1 million customers, while Spark New Zealand gained 2.5 per cent to $3.45 and SkyCity rose 2 per cent to $4.09.
Infratil rose 1.9 per cent to $2.905. On Wednesday, the Wellington-based investment firm said it anticipates flat earnings in the 2018 financial year but is confident it can keep boosting returns to shareholders and is still on the prowl for new acquisitions.
“We had a healthy bounce after there was a bit of disappointment from the market on Wednesday. We had probably perceived lower guidance than people were expecting,” said David Price, a broker at Forsyth Barr. “It was disappointing, but the issue is the stock is trading at a decent discount, and when you look across the market there’s a lot of stocks trading at a premium to our valuation, so I suppose that’s what’s given it support.” Fletcher Building gained 0.5 per cent to $8.29. The shares have dropped 22 per cent so far this year after its first-half earnings disappointed the market in February, with a cut to its full-year guidance last week accelerating that decline, but began recovering on Wednesday after hitting an 11-month low on Tuesday.
“We’ve carried on with decent volume in Fletcher Building, bouncing off what was a pretty aggressive sell-off,” Price said.
“There’s no new news, but it seems to have settled at a level around that $7.90 and it’s bounced since then.”
Air New Zealand rose 1.6 per cent to $2.495. The shares have gained 8.7 per cent since Tuesday, when the national carrier reported a 2 per cent rise in revenue passenger kilometres compared with February 2016, with capacity up 5.3 per cent, in its monthly operating statistics for February.
Short-haul passenger numbers increased 2.2 per cent, while long haul numbers rose 3.1 per cent.
“It’s another strong performance against what I would view as a fairly weak set of numbers,” Price said. “The last numbers we had from it were particularly weak so that’s a surprise on the upside.”
Argosy Property was the worst performer, down 1.5 per cent to 98c, while Metro Performance Glass fell 1.5 per cent to $1.32 and Stride Property declined 1.2 per cent to $1.72. Outside the benchmark index, NPT dropped 1.7 per cent to 59c. It will pitch its favoured tie-up with Kiwi Property Group at a special meeting next month, where shareholders will vote on whether to back the deal or accept a rival proposal from Augusta Capital to dump the board.
NPT would fund the acquisition of Kiwi Property assets by borrowing $87 million and by making a pro-rata entitlement offer of new shares to eligible NPT shareholders to raise approximately $94 million. In mater- ials explaining the Kiwi Property offer, the board based its forecasts on a one-for-one rights issue at 58c per share.
Substantial shareholder Salt Funds Management has urged shareholders to vote against the offer.
Hallenstein Glasson Holdings gained 3.6 per cent to $3.50. It posted a 35 per cent increase in first-half profit, meeting its forecast, and said early winter sales were “encouraging”.
Cavalier jumped 18.2 per cent to 65c, although it has dropped 30 per cent so far this year.