MARKET CLOSE: NZ shares follow Wall Street higher, Kathmandu, Fletcher gain
By Suze Metherell
Sept. 19 (BusinessDesk) - New Zealand shares rose in a global rally as Wall Street climbed to records overnight, while a falling New Zealand dollar further supported local stocks. Kathmandu Holdings rose, paced by Fletcher Building and A2 Milk Co.
The NZX 50 Index gained 27.163 points, or 0.5 percent, to 5181.345. Within the index, 32 stock rose, nine fell and nine were unchanged. Turnover was $153.6 million.
Overnight, Wall Street rose to a record, as investors were bouyed by the prospect of the US Federal Reserve policy makers keeping interest rates near zero for a "considerable time". Higher US interest rates would encourage some investors to repatriate funds back to the world's biggest economy which have been sitting in yield-bearing assets around the world. Asia followed suit with Japan's Nikkei 225 Index climbing 1.7 percent in afternoon trading, Australia's S&P/ASX 200 Index advancing 0.3 percent and Hong Kong's Hang Seng Index increasing 0.3 percent.
Pushing up local stocks was the continuing decline of the kiwi dollar. The trade-weighted index, which is a measure of the value of the kiwi dollar against a basket of major trading partners' currencies, has fallen some 4.6 percent from its June high, which adds support to export businesses and makes New Zealand stocks look relatively cheap.
Kathmandu, the outdoor goods company which gets two-thirds of its revenue from Australia, led the benchmark index higher up 4.8 percent to $3.09. A2, the milk marketer which gets the majority of its earnings across the Tasman, climbed 1.7 percent to 60 cents. Fletcher Building, the construction and building supplies company with international operations, advanced 0.5 percent to $8.82. Fisher & Paykel Healthcare Corp, which exports more than 90 percent of its breathing apparatus products, rose 0.4 percent to $5.04.
"Some positive leads from offshore, with the US market hitting an all time high, is always going to drive positive sentiment elsewhere," said Mark Lister, head of private wealth research at Craigs Investment Partners. "The kiwi dollar remains subdued, now off some 7 or 8 percent over the last couple months against the US dollar and that's supportive for the export sector and positive for sentiment as well."
Xero, the cloud-based accounting software company, advanced 0.9 percent to $21.40. Spark New Zealand, formerly Telecom Corp, rose 1 percent to $3.00.
New Zealand will vote in its general election tomorrow. Energy companies are prone to being sold amid political uncertainty, as a change of government would mean greater regulation for the sector.
Meridian Energy advanced 2.5 percent to a record $1.45. MightyRiverPower rose 0.4 percent to $2.41. Vector, the Auckland lines company, climbed 3.1 percent to $2.64. TrustPower increased 1.3 percent to $7.19. Genesis Energy was up 0.8 percent to $1.92.
"You would have thought with an election tomorrow there would be more caution across the market," Lister said. "The market seems reasonably relaxed about the election, and you'd almost say the market is of the view that we'll have the same government on Monday as we have today."
Pacific Edge declined 1.1 percent to 91 cents. The non-invasive bladder cancer test maker has appointed former McKinsey & Co consultant Charles Sitch to its board and hopes his contribution will speed up the global commercialisation of its Cxbladder device.
Chorus, the telecommunications network operator, rose 1.7 percent to $1.75. The company charged with building New Zealand ultrafast broadband network is in dispute with the Commerce Commission over the proposed cuts to the network operator’s regulated prices, and is pitching new Boost services outside the terms of regulation. Chorus today hit back at claims its proposed Boost variant services would breach the terms of its regulation, saying the Commerce Commission's legal advice is at odds with the law, and needs to be seen in the wider context of the changing market.
Goodman Property Trust, which is selling assets to fund development, rose 0.9 percent to $1.07 after the Auckland-based property investor said it will spend $33.4 million on four developments and has sold the Carter Holt Harvey Packaging Facility in Christchurch for $16.37 million to an undisclosed buyer.
Christchurch City Holdings, the city council's investment and infrastructure unit, has declared its takeover of Lyttelton Port Co unconditional, gaining 97 percent of shares after offering $3.95 a share, and a 20 cents per share special dividend for a total of $4.15 to mop up the remaining stock after entering into a lock-up agreement with Port Otago. Lyttelton Port shares last traded at $3.90.