Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


MARKET CLOSE: NZ shares rise to record, led by Pacific Edge

MARKET CLOSE: NZ shares rise to record as investors hunt yield, led by Pacific Edge

By Suze Metherell

Aug. 27 (BusinessDesk) - New Zealand shares rose to a record as Pacific Edge won a contract with US healthcare provider Kaiser Permanente and Genesis Energy posted earnings that beat its prospectus adding to the appeal of a market that's luring investors in search of yield.

The NZX 50 Index rose 48.070 points, or 0.9 percent, to a record 5243.7, following on from Wall Street's S&P 500 Index closing above the 2,000 mark for the first time. Within the index, 29 stocks rose, 12 fell and nine were unchanged. Turnover was $98 million.

Pacific Edge led the benchmark index higher up 8.1 percent to a near two-month high of 80 cents after the Dunedin-based biotech company said Kaiser Permanete, which has over 9 million healthcare users in the US, would trial its non-invasive bladder cancer detecting test, Cxbladder. The company is forgoing profit as it chases $100 million in annual revenue from the US market in the next five years.

"Kaiser is really regarded as the 'gold standard' healthcare network in the US," said Matthew Goodson, managing director at Salt Funds Management. "It is a real endorsement of Pacific Edge."

Genesis Energy rose 3.1 percent to $1.815 after New Zealand’s largest energy retailer posted a 53 percent drop in full-year profit to $49.2 million, beating its prospectus forecast. The decline in earnings reflected lower wholesale electricity prices, reduced electricity generation and lower retail electricity and gas sales volumes, but the company said it was on track to meet its targets for 2015 even in the face of heightened retail competition.

"It beat its prospectus numbers, although that was really on Kupe gasfield rather than the electricity business. Their guidance looks a little light, relative to market expectations but I think there is a sense that's a fairly conservative outlook," Goodson said. "The stock had been sold down aggressively, certainly relative to the other listed electricity names, ahead of its result so I think people were expecting worse than what was actually turned in."

Stocks with strong dividend yields supported the gain on the benchmark index as investor sought returns on their investments in a global market where interest rates are at historic lows. Spark New Zealand, whose shares have a dividend yield of 6.1 percent, climbed 3.4 percent to a six-year high of $3.04. Goodman Property Trust, which has a dividend yield of 5.9 percent, rose 2.3 percent to $1.13. Argosy Property, which offers a dividend yield of 5.9 percent, advanced 0.5 percent to $1.015. Vital Healthcare Property Trust, whose units offer a 5.6 dividend yield, increased 4.2 percent to a record $1.48.

"In a world of low interest rates it is people chasing yield that's what's driving Spark, and indeed what's driving the whole listed property sector," Goodson said.

Air New Zealand advanced 1.2 percent to $2.175 after the government-controlled national carrier boosted annual profit 45 percent to $262 million, on increased passenger numbers and capacity, and said it will pay out 20 cents per share this year, half of which came in an unexpected special dividend of 10 cents per share.

Ebos Group climbed 1.5 percent to $9.59 after the healthcare and animal care manufacturer trebled annual profit to $92.1 million on a full 12-month contribution from the Symbion pharmaceutical wholesaler and distributor in Australia.

Units in Fonterra Shareholders' Fund rose 0.2 percent to $6.13. Fonterra Cooperative Group announced plans to enter a joint venture with China's Beingmate that will own the dairy giant's Darnum plant in Australia and produce infant formula products for the Chinese market, for a total investment of $615 million. In a separate statement today, it said invest $555 million to build a 4.4 million litres a day drier at Lichfield in South Waikato while adding three new plants at its Edendale site in Southland boosting its production capacity. The units give holders access to the coop's dividend stream.

Outside the benchmark index, Smiths City Group climbed 8 percent to 53 cents, after a report by Edison Investment Research said the furnishing and appliance store's plans to expand to the North Island hold promise, and the stock is undervalued relative to its peers.

TeamTalk fell 4.1 percent to $1.63 after the listed telecommunications company posted a full-year loss of $8.3 million, from a year earlier profit of $3.6 million, after writing down goodwill on its Farmside rural unit, a charge that required the cooperation of its lender to avoid a covenant breach.

On the NZ Alternative Index, Snakk Media jumped 21 percent to 9.3 cents after the company, which matches advertisers with mobile users, said first quarter sales rose 67 percent to $2 million and it has hired an Australian consultancy firm as it mulls an ASX listing.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news