Market close: NZ shares gain - Chorus, Telecom lead NZX 50 gains
BUSINESSDESK: New Zealand shares rose, pushing the NZX 50 Index up 1%, led by gains in network company Chorus and Telecom and as some investors bet SkyCity Entertainment Group will eventually get its convention hall-for-slots deal.
The NZX 50 rose 34.35 points to 3416.08. Within the index, 23 stocks gained, 15 fell and 12 were unchanged. Turnover was $113 million.
Shares rose after the Reserve Bank kept the official cash rate at a record low 2.5% and hinted that economic headwinds are sufficiently strong to keep interest rates lower for longer.
The MPS “was largely expected so I don’t think it’s had much effect on our market”, said Craig Brown, senior investment analyst at One Path New Zealand.
Shares in SkyCity, the Auckland-based casino and hotel company, rose 1.8% to $3.41.
Deputy auditor-general Phillippa Smith yesterday announced an investigation into a proposal to build a convention centre in Auckland in exchange for more pokie machines. The deal has been met with criticism from opposition parties.
“SkyCity has indicated they have got the preferred status for the convention centre," Mr Brown said. "They will just be going through the process so they can ensure they get what they need for shareholders."
OceanaGold, which operates the Macraes gold field, rose 2.3% to $2.73. The stock has seesawed along with the price of gold and the historically high New Zealand dollar.
“It’s not a deep market for the stock so it can bounce around – it doesn’t reflect anything coming out of the company,” Mr Brown said.
Chorus, New Zealand's largest fixed line telecommunications network operator, was the biggest gainer on the NZX 50, rising 4% to $3.15. That was followed by a 3% rise in Telecom, the biggest company, on the NZX 50 Index at $2.40.
The two companies demerged in November last year.
Goodmans Property Trust, which owns the Highbrook Business Park in Auckland, led the decline down 2.7% to 0.72 cents.
Guinness Peat Group rose 1.1% to 45.5 cents. The company is selling its stake in Young & Co brewery in an accelerated book build for a targeted 54.1 million pounds, according to a stock exchange notice in London, after the close of trading on the NZX.
Fisher & Paykel Healthcare, which gets more than 50% of its revenue in US dollars, rose about 3% to $2.07. Freightways gained 2.5% to $3.65 and Ryman healthcare rose 2.1% to $3.40.
NZ Farming Systems Uruguay, the South American dairy farmer controlled by Singapore’s Olam International, was unchanged at 54 cents and has fallen 17% this year.
The company said today will miss its target to break even on a pretax basis this year after dry weather stunted pasture growth and milk output.