MARKET CLOSE: NZ shares rise as earnings continue; NZX gains on spec div
By Paul McBeth
Aug. 15 (BusinessDesk) - New Zealand shares rose as earnings season continued to deliver mixed results. NZX was among gainers on the day after delivering a special dividend while Heartland Bank fell on its increased bad debt provisioning.
The S&P/NZX 50 index increased 15.55 points, or 0.2 percent, to 8,987.49. Within the index, 26 stocks gained, 19 fell, and five were unchanged. Turnover was $111.7 million.
Company reporting season continued with NZX declaring a special dividend from the sale of non-core assets. Chief executive Mark Peterson was also upbeat about how far the stock market operator has come in its five-year transformation plan. The shares rose 1.8 percent to $1.11.
Heartland Bank reported an 11 percent increase in net profit, driven by growth from its reverse mortgage business, and said it will target double-digit earnings growth again for the 2019 year. Still, the stock fell 1.7 percent to $1.71 as the bank increased provisioning for bad debts.
Shane Solly, a portfolio manager at Harbour Asset Management, said some parts of the market are fully-priced. That means earnings results need to be good to lift share prices. That's added to volatility in markets, especially in Australia.
"It's very modest turnover whether it's New Zealand or Australia - investors are very much reading the entrails of results," he said. NZX's result was "better than people were expecting" while Heartland's "provisioning was slightly higher than expected".
Among companies reporting tomorrow, Skellerup Holdings fell 1.6 percent to $2.01. Precinct Properties New Zealand was unchanged at $1.39.
Fonterra Shareholders' Fund units rose 1 percent to $4.85 after Fonterra appointed Miles Hurrell interim CEO effective immediately, accelerating the departure of Theo Spierings who will linger for a month to aid the transition. The dairy cooperative will report earnings next month, which will be at the bottom end or slightly below guidance as margins were squeezed across the wider group.
Synlait Milk rose 3.6 percent to $11.19, leading the benchmark index higher. A2 Milk Co fell 1.3 percent to $1.30.
Infratil rose 0.9 percent to $3.42 and Mercury NZ fell 0.6 percent after the companies mounted a takeover offer for wind farm operator and developer Tilt Renewables at $2.30 a share. Infratil already holds a controlling stake in Tilt having overseen the demerger from Trustpower in 2016, and Solly said the partners understand the sector. Tilt shares gained 6.6 percent to $2.27.
Wellington Drive Technologies gained 5.7 percent to 18.5 cents after saying first half profit rose 18 percent on burgeoning demand for its Internet-of-Things products.
NZAX-listed Cooks Global Foods was unchanged at 7.5 cents after announcing a conditional purchase of Wellington coffee chain Mojo Coffee Cartel for $19 million in cash, scrip and debt. That's more than half Cooks' current market value.
Sky Network Television posted the biggest decline on the NZX 50 today, falling 2 percent to $2.52. Telecommunications firm Spark New Zealand yesterday expanded its foray into premium sports content by buying the rights for the English Premier League in 2019. Spark shares rose 1.2 percent to $3.895.
Among blue chip stocks, Mainfreight gained 0.5 percent to $27.97, Fisher & Paykel Healthcare Corp rose 0.5 percent to $14.86, Meridian Energy increased 0.3 percent to $3.135 and Auckland International Airport advanced 0.3 percent to $6.76.