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MARKET CLOSE: Shares gain led by Tower; Auckland Airport falls on earnings

New Zealand shares rose on optimism Tower has more scope to return capital after making progress meeting earthquake claims in Canterbury, while Fisher & Paykel Healthcare rose to a record on optimism it will benefit from a falling kiwi dollar.

The NZX 50 Index rose 12.887 points, or 0.2 percent, to 5195.630. Within the index, 24 stocks rose, 17 fell and nine were unchanged. Turnover was $83 million.

Tower climbed 2 percent to a 13-month high of $2.00. The general insurer said last week that the minimum solvency required by the Reserve Bank has fallen to $50 million from $80 million. It has previously flagged a capital return once Canterbury claims are resolved and will have funds on hand including $36 million from the sale of its remaining life insurance business.

"Most people believe that $30 million will be returned to shareholders in some way, so it adds more credibility that the balance sheet is very, very stable," said Rickey Ward, NZ equity manager at JB Were. "It's very strong in fact - no debt, excess capital and now they've got more capital."

F&P Healthcare, which gets more than half its sales in US dollars, rose 1.8 percent to $5.00, the highest in at least two decades.The New Zealand dollar has fallen to a six-month low against the US currency, giving companies with large currency exposure some relief, and in turn boosting their share price, Ward said.

Nuplex Industries led the index higher, gaining 2.3 percent to $3.08. The chemicals manufacturer exports across Australia, Asia and Europe. Fletcher Building, which generates half its income in Australia, climbed 1.1 percent to $9.25.

Earnings season continued today, with five listed companies reporting their results, helping to provide support to the benchmark index which has gained 9.8 percent since the start of the year.

"It's always challenging and very difficult to figure out if your market is undervalued or overvalued," said Ward. "We haven't seen too many companies disappoint on expectations for earnings but it comes down to your appetite for risk and what price you want to pay for future earnings."

Auckland International Airport fell 2.4 percent to $3.66 after the country's main gateway reported an 11 percent gain in full-year underlying earnings to $169.9 million, broadly in line with guidance it gave in the first half, as aeronautical charges led a gain in revenue that outpaced growth in expenses.

"It was slightly up on what the market was expecting," said Ward. "It's more the outlook statement - they're promoting a full-year profit roughly in line with what they delivered this year, and based on that you're paying a big price for it."

New Zealand Oil & Gas fell 0.6 percent to 78 cents after the exploration company, which has interests in the Tui and Kupe fields, posted a 61 percent drop in annual profit to $10.1 million, reflecting a "sharp" increase in exploration costs and some foreign exchange losses on its US dollar holdings.

Spark New Zealand, formerly known as Telecom, rose 1.4 percent to $2.94.

Outside the benchmark index, Tourism Holdings jumped 9.5 percent to a near-six-year high of $1.39 after New Zealand and Australia's largest holiday vehicle rental business said annual profit soared 192 percent to $11.1 million, beating its July guidance, as profitability improves across its New Zealand, Australian and US units. The company will pay a final dividend of 6 cents, bringing its full-year dividend to 11 cents.

SLI Systems climbed 5.7 percent to $1.48. The Christchurch-based the search engine software developer reported a smaller loss of $5.7 million, compared to the $7.2 million it flagged in its prospectus last year.

Wynyard Group fell 3.6 percent to $2.15 after the company, which makes security software, reported a wider first-half loss of $10.2 million, from a loss of $3.1 million a year earlier, as it spent more on its expansion plans and said sales in the full-year are dependent on the timing of major contracts.

Acurity Healthcare Group was unchanged at $6.65. Its independent directors have unanimously accepted Connor Healthcare's takeover offer for the 29 percent of the company it doesn't own, after Connor boosted its offer by 75 cents per share to $7.25 a share.

(BusinessDesk)

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