MARKET CLOSE: Shares rise on Nuplex, Vital Healthcare earnings
New Zealand shares rose after Nuplex Industries beat expectations for its full-year earnings. Vital Healthcare Property Trust paced the advance, while on the NZ Alternative Index, Pushpay soared 48 percent in its debut after a compliance listing.
The NZX 50 Index rose 7.707 points, or 0.2 percent, to 5062.411. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover was $102.6 million.
Investors have been hesitant to place big bets on stocks as they await companies earnings for evidence the benchmark index's 7 percent gain this year is justified. Brokerage Forsyth Barr has a median forecast for 4.9 percent sales growth for the companies it covers, and a gain in normalised earnings of 3.1 percent, suggesting turnover at listed companies is still relatively muted as the economy picks up pace.
"The market seems to be hanging out for each company announcement as it comes along," said Bryon Burke, head of equities at Craigs Investment Partners. Investors are "in a state of caution because they want to see these companies announce results and with the uncertainty of the election and the international markets have been volatile for the first time in ages after being so steady I think investors are rightly cautious and will wait till most of the companies announce their results.
Nuplex Industries, which twice lowered its earnings guidance in the past year, advanced 2.4 percent to $2.96 after it posted annual profit growth of 18 percent to $52.4 million, exceeding market expectations. The chemicals manufacturer fattened its margin on coating resins in Asia and Europe. Nuplex had cited competition across its Australia and New Zealand businesses, when lowering guidance, saying margins had been squeezed in the region for both resins and specialty chemicals.
SkyCity Entertainment Group led the benchmark index higher extending yesterday's gains, to rise 2.8 percent to $3.72. New Zealand's only listed casino company revealed hotel plans to its Auckland convention centre development yesterday, as it posted a 23 percent drop in full-year profit to $98.5 million in the 12 months ended June.
Vital Healthcare rose 0.4 percent to $1.405. New Zealand's largest listed medical and healthcare property investor said annual profit rose 7.8 percent to $37.4 million, as it recognised a $4.9 million revaluation gain in its portfolio. The company is investing in private hospital facilities in New Zealand and Australia, where 47 percent of people have private health insurance, compared to 30 percent of Kiwis, as it expects demand to increase from an ageing population, a rise in chronic disease and higher patient expectations.
Guinness Peat Group, which generated about $1.4 billion from an asset sales programme that started in 2011, fell 5.3 percent to 62 cents, extending its decline after yesterday announcing it is still grappling with its UK pension liability, while its sole investment, the Coats threadmaker unit reported a near trebling of profit to 11 million pounds in the six months ended June 30.
Infratil advanced 0.6 percent to $2.40 after the infrastructure investor said it had agreed to sell its 54 percent stake in shareholding in PayGlobal to MYOB Finance NZ for about $9.2 million. Infratil had its stake in Christchurch-based PayGlobal in its books at a value of $5.89 million as at March 31.
Spark New Zealand, formerly known as Telecom Corp, lifted 1.4 percent to $2.85. Fletcher Building, New Zealand's largest listed company, edged up 0.3 percent to $8.98.
On the NZ Alternative Index, Pushpay jumped 48 percent to $1.48 as investors snapped up the handful of shares on offer after the mobile payment app company's compliance listing, meaning no capital was raised. The shares got off to a slow start on its first day of trading, with chief executive Chris Heaslip tweeting there weren't any willing sellers. The company raised $9 million in a private equity raise issuing shares at $1 before joining the NZAX.
Pushpay joins the likes of GeoOp, which had a compliance listing on the NZAX last year. The company, whose software allows mobile businesses such as builders to manage their workforce, was unchanged at 65 cents and has shed some two-thirds from its $4.49 high in November, and is well below its $2.40 October debut. The company raised $10 million at $1 a share in a private offer before listing, which it said at the time was more than three times oversubscribed.
"It's certainly a bit different. It's what they call a compliance listing, so they've issued no investment statement, no prospectus and you certainly don't want to confuse it with a proper listing," Burke said. GeoOp's decline "unfortunately shows you what happens when you go to buy shares with no investment statement."
Outside the benchmark index, Wynyard Group fell 1 percent to $1.90. A substantial shareholder's notice today showed Sam Morgan, who made his fortune when Trade Me was sold to Fairfax Media, had taken a 5 percent stake in the security software firm after buying on-market yesterday. Morgan tweeted about his stake in Wynyard saying "might just be the next Xero".