Market close: NZ shares at three-month high as earnings loom

BUSINESSDESK: New Zealand shares rose to a three-month high on speculation the earnings season will show companies are making some headway in a subdued economy.

The gains were paced by companies as diverse as Kathmandu, Fletcher Building and Chorus.

The NZX 50 Index rose 21.61 points, or 0.6%, to 3584.81, the highest since May 2. Within the index, 27 stocks rose, seven fell and 16 were unchanged. Turnover was $73.7 million.

New Zealand’s listed companies will lift normalised per-share earnings by a median 6.1%, based on Forsyth Barr’s forecasts for 43 companies that it follows.

"The optimism is partly generated by the fact that people are investing in the stock market for income," said Greg Easton, investment advisor at Craigs Investment Partners. "Companies in the real economy are doing okay - those in charge of their own destiny."

Kathmandu, the outdoor clothing and equipment manufacturer, rose 3.1% to $1.65 and clothing retailer Hallenstein Glasson Holdings gained 1.9% to $4.26.

Fletcher Building, New Zealand largest construction company, rose 1.1% to a new one-month high of $6.34.

Chorus, New Zealand's largest fixed-line telecommunications network company since its demerger from Telecom last year, rose 1.6% to a three-week high of $3.12.

Telecom, which is the largest company on the exchange, was up 0.7% to $2.73, its highest close since August 2008. The stock has risen 29% this year.

Air New Zealand, the airline marked for government sell-down, gained 1.7% to 91 cents.

The decline was led by Goodman Fielder, the food ingredients manufacturer whose brands include Edmonds baking products and Vogel’s bread, down 3.2% to 61 cents. NZX, the stock exchange regulator, fell 2.5% to $1.15.

Cavalier, New Zealand's only listed carpet marker, declined 0.6% to $1.63.

Kiwi Income Property Trust was unchanged on $1.10. The Auckland-based property investor forecasts that the Wellington property market will remain subdued over the next four years, with vacancy rates remaining above 11%.

Nuplex Industries, the specialty chemicals maker, rose about 2% to $2.57 and SkyCity Entertainment Group, the casino and hotel company, rose 1.4% to $3.64.

Mainfreight, the biggest transport company on the NZX 50, fell 0.3% to $9.35 and power and gas distributor Vector slid 0.4% to $2.82.