MARKET CLOSE: NZ joins global rebound; Auckland Airport, A2, MetroGlass gain
By Suze Metherell
Aug. 27 (BusinessDesk) - New Zealand shares rose in a global rebound after Wall Street benchmarks rallied some 4 percent overnight. A2 Milk Co, Auckland International Airport and Metro Performance Glass clawed back from recent losses.
The S&P/NZX 50 Index rose 57.17 points, or 1 percent, to 5634.95. Within the index, 38 stocks rose, eight fell and four were unchanged. Turnover was $184 million.
Overnight Wall Street rose, rebounding from one of its worst slumps ever, as investors found value in beaten-down equities and after New York Fed Bank President William Dudley said a US interest rate increase next month “seems less compelling.” Markets across Asia followed suit with Hong Kong's Hang Seng surging 2.5 percent in afternoon trading. Japan's Nikkei 225 Index climbed 1.4 percent, Australia's S&P/ASX 200 Index rose 1.4 percent, while China's volatile Shanghai Composite Index, the key cause of the six-day stock sell-off around the world, advanced 1.6 percent.
"We've benefited from an improvement in sentiment globally," said Shane Solly, director at Harbour Asset Management. "Overnight we saw some slightly better news in the US - including some discussion that the Federal Reserve maybe doesn't have to tighten as early or increase interest rates and that was a question mark some people had raised as a policy risk the US Fed tightens while the global economy continues to be pretty soft."
Stocks which had been sold off amid volatility gained. A2 Milk, which has fallen 12 percent of the past month, led the benchmark index higher, rising 4.3 percent to 73 cents. Auckland Airport, which dropped 6.5 percent since the start of the week, climbed 3.6 percent to $4.92. Metro Glass, which has fallen 2.1 percent since the week began, rose 2.9 percent to $1.40.
Spark, formerly Telecom Corp, advanced 3.4 percent to $3.225. The telecommunications provider has been the best performer so far this week, gaining 16 percent and outperforming the benchmark index's 1.7 percent decline.
"The market has had a result that came through recently that highlighted the ability of the company to continue paying dividends - that's given some investors a bit of heart," Solly said.
Fisher & Paykel Healthcare rose 0.1 percent to $7.23. At the company's annual meeting chairman Tony Carter said the medical device manufacturer is on target to hit $1 billion in operating earnings within the next three years. It gave updated earnings guidance today, up $10 million from its May forecast. Based on an exchange rate of 65 US cents, operating revenue is forecast to be about $800 million and net profit between $135 million and $140 million.
Earnings season continued. Hellaby Holdings rose 1.1 percent to $2.85 after it announced it returned to profit in 2015 of $23.4 million, as it benefited from a series of acquisitions a year earlier, and has decided to put its footwear units up for sale after writing down their value in 2014, while looking across the Tasman for new purchases.
Scales Corp rose 1.5 percent to $2.01 after the country's biggest apple exporter boosted first-half profit 61 percent to $32.2 million, as its Mr Apple unit beat expectations.
Tourism Holdings fell 1 percent to $1.97. The campervan rental company boosted annual profit 81 percent to $20.1 million, slightly ahead of guidance, after strengthening its balance sheet and improving margins.
Delegat Group rose 1 percent to $5.30. New Zealand's largest listed wine company posted a 24 percent decline in annual profit to $32.5 million as it wrote down the value of its grapes and financial instruments used to limit its foreign currency and interest rate exposure.
New Zealand Oil & Gas was unchanged at 45 cents. The oil and gas company ramped up production during the year to June 30 to offset the sharp decline in world oil prices, turning in a net loss of $6.2 million, compared with a profit of $10.1 million the previous year.