MARKET CLOSE: NZX50 rises to record led by Metlifecare
New Zealand shares rose to a record, led by Metlifecare after it yesterday announced it had purchased Auckland land as part of new planned development. Nuplex Industries paced gains on anticipation cheaper oil would benefit the business.
The NZX 50 Index rose 12.019 points, or 0.2 percent, to a record close of 5648.625. Within the index, 29 stocks rose, 15 fell and six were unchanged. Turnover was $105 million.
Metlifcare led benchmark higher, up 3.8 percent to $4.94, and near a seven-year high, extending yesterday's gain when the retirement village operator announced it had agreed to buy 5 hectares of land in Auckland as part of a $150 million project. Summerset Group Holdings gained 1.9 percent to $3.16 extending the week's gains after it said it lifted annual sales 12 percent.
"Metlifecare's acquired a major piece of land for a very big project up in Auckland," said James Smalley, director at Hamilton Hindin Greene. "We're seeing gains in Metlifecare, admittedly on very light volume, but it is a relatively tightly held company with government super and so on having major stakes. Summerset is continuing to gain on the back of its fourth quarter metrics which the market took very well."
Nuplex climbed 3 percent to $3.07 as falling oil prices lower the specialty chemical maker's input costs and boost activity in the manufacturing sector, its main market. Oil prices are trading at a six-year low after oversupply led to a glut and as Middle East producers engaged in a price war to keep their market share.
"Being a resins-based business one of their major costs is oil and also with low oil prices you would hope would start to stimulate manufacturing demand as well," Smalley said. "You would hope they've got a little bit of a sweet spot on their demand side of their business and the costs side of their business."
Heartland New Zealand rose 1.8 percent to $1.14 after the Reserve Bank relaxed the amount of capital it requires the lender to hold.
"It does allow them to get a bit more bang for their buck out of their equity but they did say they have no intentions to reduce their amount of capital held at bank level, but it does give them flexibility," Smalley said.
Retailers, which had flagged the need for a sale boost from peak Christmas season sales, fell after electronic card data for December was largely flat. Kathmandu Holdings was the worst performer on the day, falling 4 percent to $1.93, its lowest level since November 2012. Warehouse Group, New Zealand's largest listed retailer, declined 0.4 percent to $2.77. Trade Me Group, the online auction site, slipped 0.3 percent to $3.53. Outside the benchmark index, Pumpkin Patch, the unprofitable childrenswear company, dropped 4.2 percent to 23 cents. Hallenstein Glasson, the fast-fashion chain, slipped 0.3 percent to $3.17.
"Investors are maybe a bit wary of the retail sector," Smalley said. "It's extremely competitive out there which is squeezing margins and it really is hard going for the guys."
Infratil fell 1.7 percent to $2.97 after 7.5 million shares, or 1.3 percent of the company, changed hands in a single trade.
Fletcher Building, the construction and building supplies company, slipped 0.7 percent to $8.30. Spark New Zealand, formerly Telecom Corp, slipped 0.2 percent to $3.17.
On the NZAX, GeoOp rose 1.6 percent to 65 cents. The small business app developer blamed its tightly held share register after NZX Regulation questioned the stock's 73 percent jump over the past three weeks.