MARKET CLOSE: NZ shares rise as Restaurant Brands, A2 gain; Xero, Scales drop
By Sophie Boot
Oct. 17 (BusinessDesk) - New Zealand shares rose, led by Restaurant Brands and A2 Milk while Xero and Scales Corp fell, with investors still uncertain about the make-up of the next government.
The S&P/NZX50 Index gained 21.32 points, or 0.3 percent, to 8,112.05. Within the index, 25 stocks rose, 17 fell and eight were unchanged. Turnover was $149 million.
Grant Williamson, director at Hamilton Hindin Greene, said the market was doing well in line with offshore markets, though it's still waiting for NZ First leader Winston Peters to decide which party he will form the next governing coalition with. Late today, Peters said his talks with his party's board had concluded and he will now go back to the leaders of National and Labour. He said he believes there will be a decision by the end of the week, but that is dependent on people other than him.
"The market is really still in limbo, waiting for Winston," Williamson said. "If it went through the end of this week investors wouldn't be happy, that would create uncertainty. Whether he goes one way or another, I don't think the market will be concerned."
Restaurant Brands led the index higher, up 2.6 percent to $7.07, while A2 Milk Co rose 2.6 percent to $7.90 and Synlait Milk advanced 2.4 percent to $7.62.
Ebos Group advanced 0.3 percent to $17.45. The company, which posted a record profit in 2017 driven by acquisitions and sales growth, says earnings will rise about 10 percent in the current year after a strong first quarter for its healthcare and animal products divisions.
Chief executive Patrick Davies told shareholders at their annual meeting in Christchurch that the company "made a positive start to the first quarter of the 2018 financial year, with growth from both our healthcare and animal care segments."
"It's really already priced for double-digit growth anyway," Williamson said.
Infratil edged up 0.2 percent to $3.14. The Wellington-based infrastructure and utility investor, which is one of the biggest issuers of NZDX-listed debt securities, says it won't offer holders of its November 2017 bonds an option to reinvest because it has ample funds and untapped bank facilities.
Xero was the worst performer, down 5.2 percent to $33.60. Scales Corp dropped 2.1 percent to $3.78 and Trade Me Group fell 1.6 percent to $4.39.
Outside the benchmark index, GeoOp was unchanged at 44 cents. It has quit plans for an initial public offering and Australian listing after reaching an impasse with the Australian Securities Exchange, and will instead stay on the NZAX and rely on cornerstone shareholder North Ridge Partners for funding.