MARKET CLOSE: NZ shares gain as pockets of value seen; Michael Hill, Contact rise
June 17 (BusinessDesk) – New Zealand shares rose for second day after the NZX 50 Index’s slide from its mid-May record high gave investors confidence there were ‘pockets of value’ emerging in a relatively expensive market. Michael Hill International and Contact Energy gained.
The NZX 50 rose 26.656 points, or 0.6 percent, to 4447.637. Within the index, 32 stocks rose, 13 fell and five were unchanged. Turnover was a lower-than-average $81 million.
Jewellery chain Michael Hill gained 3.9 percent to $1.33 after figures showed consumer confidence was at a three-year high this month, buoyed by an improving economy, low interest rates, and rising house prices. Clothing chain Hallenstein Glasson rose 0.2 percent to $4.98 and online auction site Trade Me increased 0.6 percent to $4.73.
Contact, the biggest utility on the NZXZ 50, gained 3 percent to $5.10. New Zealand Oil & Gas rose 3.6 percent to 86 cents and insurer Tower climbed 3.1 percent to $1.99.
“We had been struggling mightily to find any value whatsoever – now we’re starting to see the odd pocket of value,” said Matthew Goodson, managing director at Salt Funds Management.
Last year stocks were “as cheap relative to bonds as they had ever been,” he said. “Now the market is somewhat more expensive than average with bond yields 50 basis points off their lows.”
Ebos Group gained 1.4 percent to $9.70, Chorus was up 1.6 percent to $2.60 and Freightways climbed 1.6 percent to $4.50.
Units in the Fonterra Shareholders’ Fund fell 0.3 percent to $7.21 after Fonterra Cooperative Group announced plans to spend $30 million upgrading its dry storage in Taranaki. The dairy exporter wants to clamp down on freight costs as it looks to lift storage near processing facilities within easy access to ports.
Cavalier Corp fell 2.3 percent to $1.67
after founder and shareholder Tony Timpson died, aged 80.
Timpson built up the carpet maker in 1972 with Grant Biel,
only retiring from the board of Cavalier in 2009.
Pay-TV operator Sky Network Television, which has a free-to-air channel, rose 1.2 percent to $5.70 after free-to-air broadcaster MediaWorks NZ was put into receivership, as part of a restructuring plan which will see its lenders take control.
Fletcher Building gained 1.2 percent to $8.28 and Telecom rose 1.1 percent to $2.245. Infratil rose 1.4 percent to $2.23.