Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

MARKET CLOSE: NZ shares rise as Z Energy purchase approved

MARKET CLOSE: NZ shares rise as Z Energy acquisition approved

By Sophie Boot

April 29 (BusinessDesk) - New Zealand shares rose after Z Energy gained regulatory approval to acquire rival petrol chains, increasing its market share, while Skellerup Holdings suffered after a profit downgrade.

The S&P/NZX 50 Index gained 30.6 points, or 0.5 percent, to 6,820.59. Within the index, 20 stocks rose, 20 fell and nine were unchanged. Turnover was $213.8 million.

"A lot of the increase is simply the effect of Z being up, but certainly given the offshore leads it's a not a bad performance by what has been a stronger performing market for a number of years now," said Matt Goodson, managing director at Salt Funds Management. "Year-to-date our market is up about 7.4 percent, which is about 7.4 percent more than you'd get at the bank."

Z Energy led the index, gaining 9.7 percent to $7.84. It hit a record $7.90 in intraday trading after the Commerce Commission approved its bid to buy rival Caltex and Challenge! petrol station chains, saying price coordination at some stations wasn't enough to turn it down and in regions where Gull stations operate, there is more competition.

"It's clearly very positive for them, if not the NZ consumer," Goodson said. "The price reflects a degree of probability weighting which has now been removed from the calculus, and the fact that Caltex New Zealand was tracking a little better than previously indicated given that petrol margins have been so pleasantly high despite oil prices being so low. One of the justifications for high petrol prices has been high inventory prices for formerly high oil costs, but the margins have remained while oil prices have not."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Metro Performance Glass gained 3 percent to $1.74, Spark New Zealand rose 1.6 percent to $3.71 and Meridian Energy climbed 1.5 percent to $2.65.

Steel & Tube Holdings was unchanged at $2.24 and is flat for the year. It has agreed with the Commerce Commission to sell only seismic reinforcing steel mesh which has been independently tested, as the regulator continues to investigate whether Steel & Tube breached the Fair Trading Act by producing testing certificates which included the logo of a laboratory which did not undertake the testing or by making misleading or unsubstantiated representations that the steel it supplied complied with the standard.

Skellerup Holdings was the worst performer, down 5 percent to $1.32. The rubber goods maker cut its annual earnings guidance for the second time. It's projecting a profit of $20 million to $21 million, lower than 2015, as weak milk, oil and gas prices around the world weigh on demand from its customers.

"It's hardly a shock, they have been a very large supplier of dairy consumables and a very large supplier to the oil and gas sector in the US," Goodson said. "They've obviously had some headwinds as they'd been well-bid of late."

Kathmandu Holdings dropped 4.8 percent to $1.59. There was no new information on the stock, but Goodson said the retailer was hard to forecast because so much of its revenue came from peak sales periods.

Air New Zealand fell 3.9 percent to $2.46. Goodson said the stock has been weaker since ASX-listed Qantas Airways reduced its previously planned domestic capacity expansion two weeks ago.

"The recent oil rebound is a factor and with airline stocks we have massive operational and financial leverage, so earnings can move very quickly," Goodson said. "For now the market is keeping a wary eye on that."

A2 Milk Co shed 1.7 percent to $1.77 and Summerset Group declined 1.3 percent to $4.44.

Outside the main index, Tourism Holdings gained 3.4 percent to $2.72. The campervan rental company will likely exceed its 2016 guidance as margins improve in New Zealand and Australia, and is predicting growth over 2017 and 2018.

"It's an interesting contrast with Skellerup - the contrasting fortunes of various sectors in the New Zealand economy where tourism is currently booming while the agricultural sector is doing it a lot tougher," Goodson said.

(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.