MARKET CLOSE: NZ shares rise: Pumpkin Patch, retailers gain
Sept. 3 (BusinessDesk) - New Zealand shares rose, led retailers such as Pumpkin Patch, Kathmandu and Warehouse Group after earnings season showed they’ve managed to keep costs under control if a competitive market for the consumer dollar. Tourism Holdings soared on merger plans.
The NZX 50 Index rose 2.35 points, or 0.1 percent, to 3669.03 in the first trading day for September. Within the index, 23 shares rose, 17 fell and 10 were unchanged. Turnover was about $104 million.
Pumpkin Patch, the children's clothing retailer, rose 9.1 percent to $1.20. The stock has climbed almost 20 percent since posting full-year earnings last month that beat estimates. Warehouse Group, the biggest retailer on the NZX 50, gained 0.7 percent to $2.82 ahead of its full-year results on Friday. Kathmandu, the outdoor clothing retailer that posts its results on Sept. 20, increased 2.3 percent to $1.82.
"The retailers that have reported have reported well," said Greg Easton, investment advisor at Craigs Investment Partners. "They have all managed their costs and inventories well and increased the bottom line."
"There is a lot of hunger out there for yield so the fact they can perform in this environment is comfort for investors," he said.
Tourism Holdings rose 19 percent to 68 cents, a level it hasn’t exceeded since July last year, after the campervan rental company said it will acquire KEA Campers and United Campervans in a $69.5 million deal that will double its per-share earnings in 2014. Shares in the Auckland-based company have shed about 3 percent this year.
"The market is buying into the story though Tourism Holdings doesn't have a great track record for generating value," Easton said. "It is by no means a done deal - they have been fairly consistently up today - as analysis comes through overnight that could push it up further."
Skellerup Holdings, the industrial rubber products supplier that posted a record annual profit, climbed 0.6 percent to $1.65. The stock has gained 21 percent this year. The company said today it has tapped Rakon executive Graham Leaming as its chief financial officer.
Shares in Rakon, the communications components maker which dropped out of the NZX 50 Index in June, rose 2.3 percent to 45 cents. Rakon's annual meeting will be held on Friday.
The decline was paced Sky Network Television down 0.8 percent to $5.02. The Commerce Commission says it needs to dig a little deeper into the pay-TV operator's content arrangements with internet service providers after completing the first stage of its investigation. Its shares have shed about 4.5 percent so far this year.
"Sky TV will have to wait - that level of uncertainty is not investors’ best friend," Easton said.
Fletcher Building, the construction and building materials group, fell 0.8 percent to $6.60 even after it announced it has agreed to sells its New Zealand electrical products distribution business, Corys Electrical, to Sonepar SA, a global distribution company for almost $20 million.
Telecom, the largest company on the NZX, shed 0.6 percent to $2.445.
The decline was led by Goodman Fielder, the food ingredients maker, down 4.5 percent to 64 cents.