MARKET CLOSE: NZ shares higher on gains in large caps, Ryman weighs
May 19 (BusinessDesk) - New Zealand shares rose, led by Kathmandu and Air New Zealand, as improving global sentiment sparked interest in some of the biggest companies on the bourse, although Ryman Healthcare fell after earnings disappointed some investors.
The S&P/NZX 50 Index rose 20 points, or 0.3 percent, to 7,392.11. Within the index, 22 rose, nine were unchanged and 19 fell. Turnover was $103 million.
Stocks were largely positive across Asia after an overnight rebound on Wall Street with Japan's Topix and Hong Kong's Hang Seng both up 0.3 percent, although the proposed bank tax on Australia's biggest lenders continue to weigh across the Tasman where the S&P/ASX 200 was down 0.3 percent.
Hamilton Hindin Greene broker Grant Williamson said the better global mood had cheered investors. "We had seen a little bit of profit taking and that's obviously dried up today and we've had a few investors coming into the market."
Kathmandu rose 3.7 percent to $1.99, while Air New Zealand gained 2.5 percent to $2.87. Fletcher Building added 1.9 percent to $8.14.
"Blue chip stocks seem to be in good demand today," said Williamson. News that migration remained at a record high in April and short-term visitor arrivals also hit a new record also helped support Air New Zealand.
Fisher & Paykel Healthcare rose 1 percent to $10.17. Earlier this week investors were cheered by news that ResMed withdrew its complaint against F&P Healthcare in the US International Trade Commission, although it plans to replace it with a new action and is still pursuing its patent dispute with the New Zealand maker of breathing masks in several other jurisdictions.
AFT Pharmaceuticals rose 1.7 percent to $2.34 after it obtained regulatory approval to sell its Maxigesic painkiller in nine additional European countries, a move that lets it ramp up international sales of its tablets.
Xero continued to power higher on heightened interest as the company moves toward break-even, ended up 0.9 percent at $23.40 while Briscoe Group was unchanged at $4 after it said it would pursue a secondary listing on the Australian Securities Exchange next week in a bid to broaden its investor base.
In the other direction, Sky Network Television led the market lower, shedding 2.0 percent to $3.51. "It continues to drift off following the rejection of the merger," said Williamson. While Sky TV and Vodafone New Zealand this week detailed their appeal against the Commerce Commission's decision blocking the $3.44 billion merger, uncertainty remains.
Ryman Healthcare fell 1.9 percent to $8.47 after it posted a record annual profit, adding to its run of 15 years of earnings growth, as the hot property market underpinned gains from resales of its occupancy rights.
Williamson said, however, the 13 percent gain in its underlying profit missed the company's historical average of around 15 percent. "The underlying is a fraction under what the market was hoping for and that's seen the price drift off a bit," he said. News that managing director Simon Challies will leave the company at the of June due to health reasons has created some uncertainty. "He's led that company extremely well for quite some time now," said Williamson.
Dual-listed Australia and New Zealand Banking Group shed 1.4 percent to $30.66 while Sanford fell 1.4 percent to $7.05. Sanford is due to report its half-year result next Thursday.
Williamson said, however, investors will be keeping a close eye on ongoing political turmoil in the US. "There's quite a bit of uncertainty surrounding that and whether it has a flow on effect into Wall Street," he said.