MARKET CLOSE: NZ shares gain on Chorus regulatory delay, Summerset at record
Feb. 8 (BusinessDesk) – New Zealand shares rose, led by network company Chorus after the government pushed back draft plans to regulate its prices pending a wider review. Summerset Group rose to a new record on optimism about returns from retirement villages.
The NZX 50 Index gained 30.48 points, or 0.7 percent, to 4225.72. Within the index, 26 stocks rose, 17 fell and seven were unchanged. Turnover was a higher than average $195 million, with increased trading in Chorus and SkyCity Entertainment Group.
Chorus, the network company spun off from Telecom in 2011, jumped 10 percent to $3.15, regaining about half its losses when the Commerce Commission made a draft recommendation on cutting its prices in early December. Telecom gained about 2 percent to $2.35.
“For Chorus, even though we still don’t know the outcome it gives the market confidence the uncertainty will disappear,” said Greg Easton, an adviser at Craigs Investment Partners. “There’s confidence there is still an investment case for Chorus and the whole sector.”
Summerset Group, the retirement village operator that listed in late 2011, rose 3.6 percent to $2.57 – up from its initial public offering price of $1.40.
“People are buying into the story that they want Ryman-type returns,” Easton said. Rival resthome operator Ryman’s shares have almost doubled in the past two years. Ryman slipped 0.7 percent to $4.55 today.
SkyCity, the hotel and casino group, rose 1.5 percent to $4.09. The company is due to post its interim results next week and analysts are expecting a strong result, as they are with auction site Trade Me, up 2.2 percent to $4.28 today.
“We’re expecting good results from them and analysts are picking them to deliver,” Easton said. “They’ll get hammered if they don’t deliver.”
The NZX announced after the close of trading today that Trade Me will join the NZX 10 Index effective Feb. 18, replacing Sky Network Television whose index weighting is lowered because of News Corp's 44 percent cornerstone shareholding. The pay-TV company rose 0.2 percent to $5.18.
Retailers were mixed. Warehouse Group gained 1.5 percent to $3.34 and Pumpkin Patch rose 1.5 percent to $1.35. Clothing chain Hallenstein Glasson Holdings fell 1.1 percent to $5.22 and outdoor equipment retailer Kathmandu declined 0.5 percent to $2.23.
Skellerup, which makes rubber goods and milking equipment, fell 1.2 percent to $1.65 and was the biggest decliner on the benchmark index.
Air New Zealand fell 0.8 percent to $1.26. The airline is a major customer of Wellington International Airport, which the Commerce Commission said was extracting excessive profit. The airport disputes the regulator’s view.
Infratil, which owns a half stake of the airport, declined 0.8 percent to $2.41.
Fletcher Building, the biggest company on the NZX 50, rose 0.7 percent to $8.96 and was the most heavily traded stock by value.