MARKET CLOSE: NZ shares gain, led by NZX on capital return, profits

Feb. 20 (BusinessDesk) – New Zealand shares gained, led by NZX after the stock exchange operator said it will return capital to shareholders after posting a jump in profit. SkyCity Entertainment Group extended gains following its results last week.

The NZX 50 rose 26.56 points, or 0.8 percent, to 3315.57. Within the index, 32 stocks rose, eight fell and 10 were unchanged. Turnover was $47.8 million, with a US public holiday on Monday likely to have damped demand.

NZX rose about 7 percent to $2.77, the highest since December 2009. Chief executive Mark Weldon, delivering his final full-year results for the company before leaving in May, was able to announce plans to return as much as $35 million to shareholders via a one-in-10 share cancellation.

The compulsory share cancellation will be followed by a share split of four new shares for every three existing shares held, the Wellington-based company said. Analysts had expected NZX to return capital after getting the proceeds of its TZ1 registry sale. Annual profit jumped 56 percent.

"We have seen a good rebound today," said Paul Richardson, chief investment officer at BT Funds Management. NZX “was a big move. A feature of the market is there haven't been large volumes so stocks can jump around."

Stocks rose across the Asia Pacific region amid optimism European leaders are close to approving bailout funds for Greece, helping avert a slump min the region that could dent global growth.

"Will we probably see some positive release" on Greece, Richardson said. At home, “the company results season has been underwhelming but it hasn't been terrible - we need to see growth signals."

SkyCity rose 3 percent to $3.77, the highest since August 2008. Last week the casino and hotel group posted a 17 percent jump in first-half profit to a record on improved earnings from its flagship Auckland complex.

Property For Industry rose 0.9 percent to $1.18 after the property investor reported a 13 percent decline in annual earnings as it lost tenants and downsized its portfolio.

Distributable earnings, the favoured profit measure for property investors because it strips out unrealised changes in the fair value of its portfolio, fell to $15.8 million in the 12 months ended Dec. 31, from $18.2 million a year earlier, the Auckland-based company said in a statement.

Cavalier rose 1 percent to $2. On Friday, New Zealand’s only listed carpet maker confirmed a 58 percent slump in first-half earnings, saying the slump largely reflects “very difficult and challenging” conditions in Australia and New Zealand.

Sky Network Television rose 1 percent to $5.06. On Friday the nation’s main pay-TV company posted a 3.8 percent gain in first-half profit, reflecting a jump in subscribers to its My Sky set-top box and higher revenue per user on the back of new channels such as SoHo.

Fletcher Building, the biggest company on the bourse, rose 1.1 percent to $6.50. Telecom climbed 0.7 percent to $2.16. The two stocks are typically the most heavily traded on the NZX.

Contact Energy, the biggest utility on the NZX 50, fell 0.4 percent to $4.78.

(BusinessDesk)

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