June rally gaining ground after torrid May

The New Zealand sharemarket finished the week on a positive note, gaining 0.53 per cent yesterday, and a reinvigorated Fletcher Building led the way by reaching a new high. The memories of a tumultuous May are fast disappearing as the S&P/NZX 50 Index picked up 66.28 points to 12,496.27. The index has risen by more than 2.5 per cent over the past five trading days.

There were 83 gainers and 52 decliners over the whole market on steady volume of 37.26 million share transactions worth $173.37 million.

Nigel Scott, investment adviser with Craigs Investment Partners, said there has been selective buying in large-cap stocks and the market has consolidated.

“There is limited choice and the market is relatively priced, and people have concentrated on solid cyclical stocks such as Fletcher Building. We’ve also seen relief rallies in a2 Milk and Synlait.

“There’s still excess cash in the market and I think the bulls are still running.”

Fletcher Building reached a two-year peak of $7.85, up 19c or 2.48 per cent, after telling the market it will next week begin its on-market share buy-back, which may take up to 12 months to complete. Fletcher plans to buy up to 41.2m shares worth no more than $300m on the NZX and ASX markets.

Core portfolio stocks making headway were: Chorus, up 10c to $6.48; Contact Energy gaining 20c or 2.55 per cent to $8.03;

Meridian increasing 6.5c to $5.325;

Trustpower ahead by 12c to $8.70; and

Infratil rising 13.5c to $7.825.

Market leader Fisher & Paykel Healthcare bounced back 13c to $29; and strong dividend stock Spark had a breakout week, yesterday increasing 5.5c to $4.66.

Spark sat around $4.50 for a long time and has risen more than 16c this week.

Synlait climbed a further 22c or 6.25 per cent to $3.48, while a2 Milk was down 3c to $6.07 but is now solidifying over the $6 mark.

SkyCity Entertainment rose 9c or 2.52 per cent to $3.66 and Tourism Holdings was up 3c to $2.55.

Z Energy gained 7c or 2.71 per cent to $2.65; Restaurant Brands rose 39c or 2.89 per cent to $13.90; apple exporter Scales Corporation increased 11c or 2.3 per cent to $4.89; and kiwifruit grower and packer Seeka was up 10c or 2.08 per cent to $4.90.

In the retirement village sector, which is facing some questions, Summerset Group Holdings gained 35c or 2.79 per cent to $12.90, Oceania Healthcare increased 4.1c or 2.93 to $1.44, and Ryman Healthcare was down 17c to $12.80, having slipped from $14.95 on May 12.