MARKET CLOSE: NZ shares gain at close; Tower, Contact rise, Rakon falls
Aug. 31 (BusinessDesk) - New Zealand shares rose on the day after a late rally by companies including Tower Ltd., Heartland New Zealand and Contact Energy Ltd. as the prospect of dividends and the emergence of bargain hunters helped lift the NZXZ 50 Index out of the red.
The NZX 50 rose 5.33, or 0.2%, to 3323.06, the highest close since Aug. 4. Within the index, 33 stocks rose, 12 fell and five were unchanged. Turnover was about $120 million.
Tower led gainers, rising 5.7% to $1.48. The shares sank to a 2 1/2 year low earlier this month. Yesterday the insurer controlled by Guinness Peat Group said annual earnings are likely to meet analyst estimates this year. Separately, chairman Tony Gibbs resigned.
Heartland rose 3.6% to 58 cents after completing its capital raising via a share purchase plan.
Contact, which sheds its 12
cents-a-share final dividend tomorrow, rose 2.5%
Telecom Corp., which went ex-dividend today, fell about 7% to $2.54 on a day it released further details of its separation plans and confirmed chief executive Paul Reynolds will leave once the split is bedded down. The shares rose to $2.765 on Aug. 29, the highest since September 2009.
Rakon, which makes components for navigation systems and smart phones, tumbled 8.1% to 79 cents after saying the high kiwi dollar could wipe 44% off its operating profit this year.
Rakon "has taken the market by surprise," said James Smalley, a client adviser at brokerage Hamilton Hindin Greene in Christchurch. "It is the classic scenario - in the currency they are selling in they're actually doing pretty well," he said. "If you generate the majority of your revenue in U.S. dollars and the kiwi goes up you can delay the pain but you will feel it eventually."
Goodman Fielder fell 7.4% to 88 cents, extending its slide since announcing a charge against its bakery business that pushed the food maker to a net loss.
PGG Wrightson Ltd., New Zealand's biggest rural services company, fell 2% to 46 cents. Wrightson posted a $30.7 million annual loss this week after taking charges against its wool assets and a livestock supply contract.
APN News & Media, which tumbled to a record low with the announcement of newspaper impairments, continued its climb back today, rising 3.8% to $1.09.
Vector Ltd., the electricity and gas lines company, rose 2.4% to $2.52. Vector last week posted a 4.1% gain in annual profit to $203.8 million as it booked gains from a deal with Transpower New Zealand Ltd. and a tax accounting benefit.