MARKET CLOSE: NZ shares rise, led by Pacific Edge on patent news; Chorus falls
By Suze Metherell
Sep. 4 (BusinessDesk) - New Zealand shares rose, led by Pacific Edge after it was granted a US patent for skin cancer detection, signalling a new product line for the biotech company. Chorus fell after the Commerce Commission said it had been advised a variant 'Boost' service would breach the terms of the company's regulation.
The NZX 50 Index rose 4.153 points, or 0.1 percent, to 5228.549. Within the index stocks were mixed, as 18 gained, 20 fell and 12 were unchanged. Turnover was $156 million.
Pacific Edge jumped 9.8 percent to 90 cents, and has gained 20 percent in the past month. The Dunedin-based biotech company is targeting the US market with its non-invasive bladder cancer test by securing healthcare provider trials, and announced it had secured a US patent for a skin cancer test today. Earlier in the year the stock touched a record of $1.76, before falling in a global sell-off of biotech and software stocks when investors questioned their high valuation to earnings ratio.
"There has been a string of positive announcements for the company which have a pretty strong impact on the share price," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It's been a very big rebound, but it is still well and truly off those high levels."
Chorus slipped 0.6 percent to $1.77. The telecommunications network operator charged with building New Zealand ultrafast broadband network is in dispute with the Commerce Commission over the proposed cuts to the network operator’s regulated prices, and is pitching new services outside the terms of regulation. The regulator today sought feedback on legal advice which held the opinion those new variant services fell outside the terms of regulation.
"It's what I call a cheap stock with a certainly above-average risk profile, and it's one of those stocks that will fall into an uncertain camp for quite a while," Lister said. "There are two schools of thought on Chorus - the people who think it's good value and ultimately a lot of these issues will be resolved to some degree and the company will have a future. Others put it firmly in the too hard basket and don't want to go there."
Trade Me Group, the online auction site, was the worst performer on the day, dropping 2.4 percent to $3.67. Mainfreight, the logistics company, declined 2 percent to $14.85.
Vector, the Auckland-based lines company, fell 2.3 percent, or 6 cents, to $2.58, after shedding rights to a final dividend payment of 7.75 cents per share.
Fletcher Building, New Zealand's largest listed company, fell 0.2 percent to $9.24.
Spark, formerly Telecom Corp and Chorus's biggest customer, rose 1.7 percent to $3.04. Auckland International Airport increased 1 percent to $3.755.
Precinct Properties advanced 1.8 percent to $1.13 after announcing it had properties short-listed as possible options for the government Wellington accommodation project for office space.
Outside the benchmark index, Briscoe Group was unchanged at $2.90, having jumped to an intraday record of $3 after the homeware and sporting goods retail chain, boosted first-half profit 24 percent to $18.5 million as it improves the layout of its stores and benefits from a strong New Zealand dollar.
PGG Wrightson, the rural services firm controlled by China’s Agria Corp, rose 1.2 percent to 41 cents. Rob Woodgate has resigned as chief financial officer after more than five years with Wrightson.
Dual-listed APN News & Media rose 4.8 percent to 87 cents after announcing plans to raised US$250 million from US institutional investors in an senior unsecured note offer. The offer document outlined more details about the media group's plan to spin-out its New Zealand business and list it on the NZX.