MARKET CLOSE: NZ shares rise; SkyCity gains, Chorus falls
MARKET CLOSE: NZ shares rise; SkyCity gains, Chorus falls after report
Dec. 16 (BusinessDesk) – New Zealand shares rose as investors were drawn to companies with a growth story, such as SkyCity Entertainment, while Chorus fell on disappointment a report on its funding issues hasn’t swayed the government.
The NZX 50 Index gained 18.552 points, or 0.4 percent, to 4735.611. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover was $149 million.
SkyCity rose 6.3 percent to $3.89 on the prospects of growth in visitors from Asia to its Adelaide casino and hotel complex redevelopment, its operations in Queenstown and even its yet-to-be-built convention centre in Auckland.
“It really is a growth story, which is Chinese tourism,” said Greg Easton, adviser at Craigs Investment Partners. Analysts at Craigs said in a report this month that SkyCity faced a “benign earnings outlook”.
Auckland International Airport, the nation’s busiest gateway, rose 1.7 percent to $3.595.
Fonterra Shareholders’ Fund rose 2.3 percent to $5.81 ahead of the GlobalDairyTrade auction this week. The dairy giant unexpectedly held its milk payout forecast unchanged last year, as it faces a squeeze between high prices for milk and prices for cheese and casein that aren’t rising as much.
Chorus fell 2.7 percent to $1.43 after a report into its future by Ernst & Young Australia said options for coping with regulated price cuts on its copper lines while building the new UFB network include allowing the quality of its service to drop by under-investing in maintenance and upgrades. Communications Minister Amy Adams said Chorus could make up some of the funding shortfall “by implementing a number of cash flow savings initiatives.”
“The report and the statements that came out along with it haven’t really given the market any more certainty about Chorus’s future,” Easton said.
Units in Kiwi Income Property Trust were halted at $1.10 before trading opened today to allow Commonwealth Bank of Australia to sell its 8.6 percent stake in the property investor having been bought out of the management contract for $70.5 million.
Argosy Property fell 0.6 percent to 91 cents after the property investor sold a poorly performing office building in Auckland’s Ellerslie for 92 percent of book value.
A new five-year high in the New Zealand/Australian dollar cross-rate weighed on companies with exposure across the Tasman. Fletcher Building, the biggest company on the exchange, fell 2.3 percent to $8.57, outdoor equipment chain Kathmandu dropped 2.7 percent to $3.25 and clothing retailer Hallenstein Glasson declined 1.5 percent to $3.41.
Property for Industries gained 0.8 percent after its latest independent valuation lifted the value of its portfolio 2.4 percent to $841.7 million.
State-controlled power companies continued their recovery from recent lows, with instalment receipts in Meridian Energy up 2 percent to $1.005 and shares in MightyRiverPower gaining 1 percent to $2.07. TrustPower gained 2.2 percent to $6.65, while Contact Energy slipped 0.4 percent to $4.97.