MARKET CLOSE: NZ stocks rise, ANZ, Fletcher gain

MARKET CLOSE: NZ stocks rise, ANZ, Fletcher gain

By Suze Metherell

May 5 (BusinessDesk) - New Zealand shares rose, paced by Australia and New Zealand Banking Group after it reported its first-half earnings. Fletcher Building advanced after affirming its annual guidance.

The NZX 50 Index rose 20.713 points, or 0.4 percent, to 5787.791. Within the index, 23 stocks rose, 16 fell and 11 were unchanged. Turnover was $97.5 million.

ANZ rose 3 percent to $35.75 after it post a 5 percent gain in cash profit to A$3.67 billion, with a 6 percent increase in net interest income to A$7.14 billion. Yesterday Westpac Banking Corp announced a A$2 billion capital raise via its dividend reinvestment plan to bolster its equity buffer in the face of increasing regulatory pressures from the Australian Prudential Regulation Authority. ANZ plans to sell Esandra Dealer Finance unit for as much as A$1.2 billion in order to raise more cash.

"There isn't any backdoor equity raising there, what ANZ is doing instead is they've put their equipment and car financing business Esandra on the market, so they're looking to improve their capital position by other means," said Matthew Goodson, the managing director of Salt Funds Management. "There is a lot of focus in Australia at the moment of the need for the major banks to raise significant amounts of capital over the next three years. They've tended to have very low mortgage risk ratings and they have to set aside a great deal of capital against that."

Fletcher Building rose 0.8 percent to $8.38. The construction and building supplies firm reiterated its forecast for full-year earnings and capital spending to be at the lower end of its guidance range between $650 million to $690 million in the 12 months ending June 30.

"Most of the leading analysts in the stock were in the $640 to $650 million range," Goodson said. "It's a slight upgrade to where people were at, but not particularly meaningful."

Air New Zealand, the national carrier, led the benchmark index higher rising 3.9 percent to $2.78.

Meridian Energy, the government controlled energy company, was the worst performer on the benchmark index dropping 3.1 percent to $2.375. MightyRiverPower declined 2 percent to $2.915. Contact Energy slipped 0.4 percent to $5.55 and Genesis Energy fell 0.3 percent to $1.92.

Outside the benchmark index, Vista Group climbed 4 percent to $5.20. The cinema software developer and data collector's subsidiary Movio entered a multi-year agreement with AMC Theatres, the second largest cinema chain in the US for use of its Movio Cinema product, increasing Vista's market share to 51 percent in the US. However the deal won't push up its revenue as outlined in its prospectus last year, the company said.

On the New Zealand Alternative Index, VMob Group was unchanged at 1.7 cents. The voucher app developer plans to raise $3 million through the issue of up to 187.5 million ordinary shares at an issue price of 1.6 cents per share to help fund its ASX listing plans.

(BusinessDesk)

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