Kathmandu leads index up on quiet day
Local trading muted as investors digest latest reweightings
New Zealand shares rose to a record in quiet trading as investors digested the latest round of index reweightings and wait on earnings. Kathmandu Holdings led the index up.
The S&P/NZX 50 index rose 41.85 points, or 0.4 per cent, to 9515.12.
Within the index, 25 stocks gained, 20 fell and five were unchanged.
Turnover was $96 million, with just two companies trading on volumes of more than a million shares. Friday’s turnover was $407m.
“It’s just drifted up following where it’s been going for the last few days with no real driver,” said David Price, a broker at Forsyth Barr.
Local trading was muted with little corporate news yesterday and as investors let Friday’s reweightings to the S&P/NZX and FSTE Russell indices bed in. About 104 million shares were traded on Friday, compared with 18.3 million yesterday and the 28.9 million daily average for the past three months.
Kathmandu led the market higher, up 5.6 per cent at $2.46 on 86,000 shares, about half its average volume. The retailer will report firsthalf earnings next Tuesday, having warned of sluggish sales in the Christmas and New Year period. Cornerstone shareholder Briscoe Group increased 0.3 per cent to $3.35. Managing director Rod Duke last week reiterated his interest in taking control of Kathmandu. Warehouse Group, which dropped out of the NZX50, will report first-half earnings today. Price said investors will be watching for further signs that the retailer’s new strategy is improving margins. The shares fell 2.4 per cent to $2.08. Dual-listed Michael Hill International rose 2.7 per cent to 77 cents on a volume of 1.1 million, about three times the 90-day average. Listed milk processors Synlait Milk and Fonterra Co-operative Group are reporting first-half earnings tomorrow. Craigs Investment Partners analyst Adrian Allbon expects the results will show vastly different outcomes, with Synlait likely to report earnings growth and Fonterra contending with an overgeared balance sheet.
Synlait shares rose 0.1 per cent to $11.20 on a volume of 242,000 shares, twice its three-monthly average. Fonterra Shareholders’ Fund units rose 1.4 per cent to $4.35 on 238,000, below its 393,000 average volume.
A2 Milk, which counts both firms as suppliers, fell 0.8 per cent to $13.82 with 457,000 shares changing hand, less than half the usual volume. Glass products maker Metro Performance Glass, not on the benchmark index, fell 7.7 per cent to 48 cents after downgrading its earnings guidance again, citing a poor performance from its Australian division.
A slowing housing market across the Tasman has weighed on Fletcher
Building in recent months after the country’s biggest listed construction company cited tougher Australian conditions as a headwind. It rose 3.4 per cent to $4.83 on a smaller than usual volume of 499,000.
Contact Energy was the most traded stock yesterday on a volume of 2.4 million, more than its 90-day average of 1.5 million. It rose 1.1 per cent to $6.47. Auckland International Airport gained 0.6 per cent to a record close of $7.99 on a volume of 2 million. Spark New Zealand increased 0.6 per cent to $3.645 on a volume of 1.7 million, less than a third of its three-monthly average.
Summerset Group posted the biggest fall in the benchmark index, down 2.8 per cent at $6.71 on a smaller volume than usual of 182,000.
Chorus fell 0.5 per cent, or 3c, to $5.81 after shedding rights to a 9.5c dividend.