MARKET CLOSE: NZ shares join global rally; Contact, Auckland Airport, A2 gain

New Zealand shares joined a global rally after Federal Reserve designate chair Janet Yellen indicated no rush to remove economic stimulus. Contact Energy and Auckland International Airport paced the gains.

The NZX 50 Index climbed 8.520 points, or 0.2 percent, to 4927.179. Within the index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $119 million.

Equity markets were stronger across the Asia Pacific region on the back of Yellen’s comments that the US economy and labour market were performing “far short of their potential” and needed to improve before there could be any tapering of stimulus. Japan’s Nikkei 225 Index was up 2.1 percent and Australia’s S&P/ASX 200 Index was up 0.8 percent.

“The key focus has been global, with people looking at the initial testimony for Janet Yellen’s confirmation hearing,” said Matt Goodson, who helps manage $650 million of equities at Salt Funds Management. “People took the view there might be a little more tapering for longer.”

Contact rose about 2 percent to $5.12 and TrustPower rose 0.5 percent to $6.67. Among the other utilities, Mighty River Power fell 1.2 percent to $2.145 and Meridian Energy was 0.5 percent lower at $1.04.

Auckland Airport rose 0.9 percent to $3.43, and A2 Corp climbed 5.4 percent to 78 cents, leading gainers on the day.

Air New Zealand ended the day unchanged at $1.67 after the national carrier said it will take up its full entitlement in a Virgin Australia Holdings rights issue, at a cost of between A$81 million and A$116 million.

“Air New Zealand’s share of the Virgin rights issue isn’t hugely material for itself,” Goodson said. “Virgin is a highly strategic asset in the future, and it’s important to keep up with it.”

“The market is also looking forward to when and how the government will sell down some of its stake” in the airline, he said.

Fletcher Building, the country’s biggest listed company, rose 0.2 percent to $9.7 after Australian building materials maker James Hardie doubled first-half profit, and said the New Zealand housing market was showing increased activity.

Steel & Tube Holdings fell 1.3 percent to $3.11 after the steel products maker’s annual meeting yesterday, when it said first-half earnings will only marginally improve as the local economy revives.

Dual-listed Australian banks gained in the rally across the Tasman, with Westpac Banking Corp gaining 1.6 percent to $37.20 and Australia & New Zealand Banking Group up 1 percent to $35.96. Financial services firm AMP fell 0.6 percent to $5.11.

Retailers gained despite government figures showing weaker consumer spending than expected in the September quarter, with Warehouse Group up 1.3 percent to $4, online auction site Trade Me gaining 1.4 percent to $4.35, and clothing chain Hallenstein Glasson rising 0.8 percent to $5. Jewellery chain Michael Hill International was unchanged at $1.58, as was fast-food operator Restaurant Brands at $2.97.

Diligent Board Member Services fell 0.9 percent to $4.23 after the governance app developer said it’s hired outside counsel to investigate the accounting errors that need to be restated, delaying the lodging of its financial statements.

Pyne Gould Corp rose 2.3 percent to 44 cents after the firm said it plans to re-domicile in Guernsey and shift its listing to the London Stock Exchange. The measure is backed by controlling shareholder George Kerr, and will be put to investors at this year’s annual meeting.

Rakon gained 4.6 percent to 23 cents after it widened its first-half loss to $45.7 million from a loss of $4 million a year earlier, taking a bigger charge in writing down the sale of its Chinese factory.

(BusinessDesk)