MARKET CLOSE: NZX 50 hits record as Comvita downplays rust outbreak; Tower gains on takeover
By Paul McBeth
June 27 (BusinessDesk) - New Zealand shares rose to a new record, led by a recovery in Comvita after the manuka honey health products maker downplayed the impact the Myrtle Rust fungal disease would have on the wider industry, while Tower jumped on news its board was backing an Australian takeover bid.
The S&P/NZX 50 Index climbed 30.85 points, or 0.4 percent, to 7,626.35, having reached an intraday high of 7,637.05. Within the index, 27 stocks rose, 15 fell and eight were unchanged. Turnover was $130 million.
Comvita led the benchmark index higher, rising 6.7 percent to a month-high close of $5.87 after the Te Puke-based company said Myrtle Rust posed a low risk to the manuka honey industry based on Australia's experience.
"Investors were pretty cautious about that and that news certainly boosted that share price," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. The Myrtle Rust outbreak was the latest in a string of bad news for Comvita's share price, pushing it near two-year lows, and Williamson said it was "a nice recovery today seeing the bargain hunters come in."
Williamson said the America's Cup victory by Emirates Team New Zealand didn't give the market the same boost as in the past, although local success on the international scene tended to help investor sentiment.
Fisher & Paykel Healthcare, which derives most of its income from exports, rose 1.2 percent to close at a new record $11.38.
Tourism Holdings rose 2.2 percent to $4.10, Z Energy increased 2.1 percent to $7.81, Fletcher Building gained 1.8 percent to $7.97 and dual-listed lender Australia & New Zealand Banking Group advanced 1.6 percent to $29.34.
Sky Network Television increased 1.5 percent to $3.37 having slumped to near an eight-year low yesterday after giving up on a planned merger with Vodafone New Zealand. Spark New Zealand, which staunchly opposed such a deal, gained 1.3 percent $3.89.
Outside the benchmark index, Tower jumped 15 percent to $1.33 after the board gave its blessing to a takeover bid by Australia's Suncorp Group. The ASX-listed owner of Vero Insurance New Zealand is offering $1.40 a share for Tower, valuing the general insurer at $236 million, and will need regulatory and shareholder approval to get over the line.
Tegel Group Holdings fell 1.7 percent to $1.13 after the poultry company reported earnings near the bottom of already downgraded guidance.
Scales Corp was the worst performer on the day, down 3.5 percent, or 12 cents, to $3.32 after shedding rights to a 10 cents per share dividend. Meridian Energy fell 2 percent to $2.92 and Genesis Energy declined 1.2 percent to $2.40.
Orion Health Group climbed 9.2 percent to $1.30 and is up 37 percent from a record low it reached earlier this month. Trading of rights for a $32 million share issue closed on June 23 and the offer is scheduled to close on June 29.
NZX was unchanged at $1.10 after the stock market operator signalled plans to consolidate its three markets into a single board after its two markets for smaller companies - the NZ Alternative Index and NXT - failed to gain traction.