MARKET CLOSE: NZ shares slip while rounding out best year since 2004
Dec. 31 (BusinessDesk) – New Zealand shares fell on the last trading day of the year, though not enough to prevent 2012 being the best for the NZX 50 Index since 2004, with the strongest gains coming from growth stocks and companies making comebacks.
The NZX 50 fell 14.389 points, or 0.4 percent, to 4066.513 and has advanced almost 25 percent in 2012, just below 2004’s 25 percent gain. Within the index, 23 stocks fell, 13 rose and 14 were unchanged. Turnover was a subdued $24.6 million in a shortened trading session, with brokerages on reduced staff over the Christmas New Year holiday period.
While there was much talk about New Zealand stocks benefitting from a global search for yield, the top three performers on the NZX 50 – Diligent Board Member Services, Xero and Pumpkin Patch – didn’t pay dividends this year.
Diligent, whose software for company directors can be accessed via an iPad, fell 0.2 percent to $5.46 on the final day of 2012, bringing its annual gain to 183 percent. Xero, which asked investors for more patience on profits while it chases global growth, was unchanged at $7.60 for a 175 percent annual gain. Pumpkin Patch, the children’s clothing chain, rose 0.8 percent to $1.34 and has advanced 108 percent this year.
“Heaps has been written about the search for yield and the vast majority of volume this year was for yield but the really high returns have come from recovery stories and growth stocks,” said Greg Easton, an adviser at Craigs Investment Partners.
After “a great year for the New Zealand market” in 2012, Easton said he is “cautiously optimistic” for 2013. “I think there will be consistent flows into the market” with volumes helped by the likely sell-down of state-owned power company MightyRiverPower.
The biggest gainer on the stock market has been Veritas Investments, formerly known as Salvus Strategic Investments, which was a shell company until the announcement last week that it would buy the Mad Butcher chain for $40 million. Veritas rose 5.3 percent to 10 cents on the final day of trading, for a 965 percent annual gain.
Dorchester Pacific, which survived after a complex restructuring of its capital in 2010, rose 3 percent to 33 cents and has gained 300 percent this year. In September, it agreed to buy EC Credit for $18.5 million in cash, stock and earn-outs.
Of start-ups that finally came good in 2012, Pacific Edge rose 1.9 percent to 54 cents for a 179 percent annual gain as it pushed ahead with sales of its bladder cancer test. A2 Corp, which markets milk with a protein variant said to have health benefits, was unchanged at 54 cents and has advanced 125 percent in 2012.
“There’s been a good mix of participants in the market – yield-hungry investors and more speculative types,” Easton said.
Chatham Rock Phosphate, which is developing ambitious and yet to be government-approved plans to mine phosphate from the sea floor, was unchanged at 33 cents for a 65 percent annual gain. Renaissance, which re-defined its business after losing exclusivity on sales of Apple products, was unchanged at 20 cents and has risen 111 percent this year.
Ryman Healthcare, a hot favourite among brokers for 2013, was the stand-out blue chip in 2012. It rose 0.9 percent to $4.55 on the last day of the year for an annual gain of 66 percent.
Fletcher Building, the biggest company on the benchmark index, fell 0.1 percent to $8.39 and is up 37 percent in the year. Telecom fell 1.7 percent to $2.275 and is up 12 percent in the year.
Chorus, the network company spun off from Telecom last year, rose 1 percent to $2.94 on the final day of 2012, and was one of the few decliners in the year, falling 6.7 percent as the Commerce Commission signalled its intention to clamp down on the prices it can charge for network access.
Mainfreight, the transport group which is also among broker tips for 2013, fell 0.9 percent to $11.70 and has gained 19 percent in 2012. Air New Zealand, the national carrier, fell 1.2 percent to $1.295 and has gained 46 percent in the past 12 months.