MARKET CLOSE: NZ shares rise as Orion Health wins contracts, SkyCity climbs; A2 drops

New Zealand shares rose after Orion Health Group said it won new UK clients and SkyCity Entertainment Group rebounded following a conference call for analysts while A2 Milk Co dropped.

The S&P/NZX 50 Index gained 0.9 points, or 0.01 percent, to 6726.02. Within the index, 24 stocks rose, 20 fell and six were unchanged. Turnover was $168 million.

Orion led the index, advancing 4.5 percent to $4.20, a nine-month high, after the health systems software developer signed up a pair of new clients in the UK. It's gained 20 percent in the last week, having announced three significant deals in the last fortnight. The shares have risen from $3.12 before the first announcement on March 30, having fallen to an all-time low of $2.53 in late February from a listing price in November 2014 of $5.70.

"That announcement has certainly seen a very nice rebound in the share price," said Grant Williamson, director at Hamilton Hindin Greene. "It has been under pressure for quite some time, but they've made a few good announcements recently and it really does appear to have turned the trend on that stock quite nicely. Following its listing it more than halved in value to its lows earlier this year, I think it was always going to rebound at some stage and it's doing that at the moment."

SkyCity grew 4 percent to $4.92. Last week it shed 7 percent over Thursday and Friday's trading sessions after the resignation of its chief executive Nigel Morrison. The company also gained yesterday after it ran a conference call with investors and analysts, which media were barred from, amid reports its Darwin casino is being touted to international investors.

"They're rebounding nicely after the resignation of the CEO sell off, there's obviously a bit of bargain hunting going on," Williamson said. "[The analyst call] has flowed through to investors, and they like what they hear."

Restaurant Brands New Zealand which operates KFC, Pizza Hut, Carl's Jr and Starbucks franchises rose 3.1 percent to $5.05. The company will announce its earnings on Thursday.

Sky Network Television grew 2.2 percent to $4.66 and Xero added 2.1 percent to reach $16.70.

A2 Milk was the biggest decliner, dropping 6.3 percent to $1.78. Along with fellow listed Australian infant formula producers Bellamy's and Blackmores, A2 has suffered after Chinese import regulations and taxes changed on April 8.

"The A2 sell-off is actually coming from further Chinese regulations into importing foodstuffs," Williamson said. "Although dairy is really quite exempt, it has flowed through with the Australian formula manufacturer getting sold off today. I think it's a bit of a knee-jerk reaction to that news, and it will be pretty limited. It's just caught up in the hype, and normally when that's the case you will see the share price rebound pretty quickly."

Spark New Zealand shed 1.7 percent to $3.47, Mighty River Power lost 1.6 percent to $2.85, and Stride Property fell 1.5 percent to $2.26.

Outside the main index, Cavalier Corp declined 1.4 percent to 69 cents. It was asked by the NZX to explain a 27 percent jump in its share price in less than a week. Cavalier said it continues to meet its obligations and was aware of was a report published by Vulcan Capital on April 7 which advised investors to buy the shares at 57 cents.

Cavalier has gained 14.8 percent this year, and posted an improved first-half profit in February while signalling its full-year earnings will probably be at the top end of expectations as it restructures its wool business and reduces debt.

"That share price has been improving since they came out with their half-year report in February," Williamson said. "It's not a highly traded stock, so any recommendation can push that stock around temporarily quite a way."

(BusinessDesk)