New Zealand shares rose as Fletcher Building made up some ground after yesterday's downgrade-induced slump, while A2 Milk and Goodman Property Trust gained. Fonterra Shareholders' Fund fell ahead of its first-half results tomorrow.
The S&P/NZX 50 Index rose 28.50 points, or 0.4 percent, to 7,085.55. Within the index, 27 stocks rose, 18 dropped and five were unchanged. Turnover was $149 million.
Fletcher gained about 1 percent to $8.36, having slumped 10 percent yesterday after unexpectedly cutting its full-year earnings guidance by $110 million because of losses related to construction projects. The downgrade came just four weeks after the company affirmed earlier guidance for the full-year while announcing its first-half results.
"We saw an initial knee-jerk reaction downwards on Fletcher's negative news yesterday and then later in the day we did start to see some bargain hunters come back into the market," said Grant Williamson, a director at Hamilton Hindin Greene. "The bigger picture is the news they came out with increased uncertainty about the company and in its management as well." The stock is widely held by overseas investors and may well be in for more volatility as they review analysts' reports into the disclosure, he said.
Kathmandu rose 1.6 percent to $1.96 after the outdoor clothing chain reported first-half profit of $10 million, just ahead of its guidance of $9.9 million and up from $9.4 million a year earlier. Sales edged up 0.2 percent to $196 million.
The result was "very much what was expected - no real surprises," Williamson said.
Goodman Property rose about 3 percent to $1.215, Precinct Properties climbed 1.7 percent to $1.20, Argosy Property gained 2 percent to $1.01 and Kiwi Property Group rose 0.4 percent to $1.385. Williamson said property stocks have suffered in the past six months, as rising interest rates eroded the appeal of their dividend yields. But the interest rate story was "a little bit overdone" and the selloff had since attracted some bargain hunting.
Fonterra fell 0.8 percent to $6.22 ahead of its first-half results, which Williamson said are likely to reflect what was an underwhelming start to the dairy season. By contrast, milk and infant formula marketer A2 Milk led the index higher, gaining 4.5 percent to $2.80. The company was "a market darling" that hadn't faced the tough times of some of its Australian counterparts, Williamson said.
Comvita, the honey products company, gained 1.3 percent to $8.
Sanford declined 2 percent to $7.25 in its first day on the NZX 50. Warehouse Group, which has dropped out of the index, rose 0.4 percent to $2.35.
Among other companies, Xero rose 1.3 percent to $19.80 and Chorus climbed 1.2 percent to $4.20. Auckland International Airport gained 1.9 percent to $6.98 and Summerset Group rose 1.6 percent to $5.22.
Tourism Holdings was the biggest decliner on the NZX 50, falling 3.6 percent to $3.74, while Metro Performance Glass fell 2.1 percent to $1.40.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Miriam Clements explains her battle with Auckland Council
- Craigs' Mark Lister on markets, the OCR review, business confidence
- Fletcher Building chief executive Ross Taylor on the company's restructure
- NZME chief executive Michael Boggs on the NZ Herald's new paywall
- NBR Radio: The best interviews – updated daily