Market close: NZ shares rise on earnings optimism

BUSINESSDESK: New Zealand shares rose on optimism the looming earning season may be brighter than feared. Companies ranging from retailer Warehouse Group to manufacturer Skellerup paced the advance.

The NZX 50 Index rose 11.72 points, or 0.3%, to 3485.77. Within the index, 23 stocks rose, 12 fell and 15 were unchanged. Turnover was $92 million.

"I don't think earnings season is going to disappoint - we are slowly grinding to a better story," Rickey Ward, domestic equities manager at Tyndall Investment Management. "I don't think we will get any negative news compared to what we were expecting."

Warehouse rose 1.5% to $2.61, its highest level since May 22. Skellerup rose 2.1% to $1.46.

Gainers were led by would-be bank Heartland, up 5.5% to 58 cents and Guinness Peat Group, the investment company looking to sell-down its assets, up 3.2% to 49 cents. GPG yesterday announced the third sale of a UK brewery business.

Telecom, the largest company on the exchange, edged up 0.6% to $2.535.

The decline was paced by tech stocks, Xero and Diligent Board Member Services who joined the NZX 50 in June, replacing struggling GPS-components maker Rakon and building supplies manufacturer Steel & Tube.

Xero, the cloud-based accounting platform provider, fell 2.7% to $5.40. Diligent fell 2.3% to $3.87.

Mr Ward said that while Diligent is "starting to acquire a proven track record", Xero can't "keep trading like it’s making a lot of money when it's not".

Fletcher Building, New Zealand's largest construction company, fell 0.2% to $5.84.

Shares in Methven rose 0.8% to $1.26 after the tapware and bathroom fittings manufacturer announced it will only hike directors’ fees if the company increases its net profit by more than 20%.

Shares in Energy Mad, the lightbulb innovator and marketer, were unchanged on 52 cents and have fallen 34% over the last six months. The company said it remains committed to hitting the 2012-13 $4 million net profit projection after badly missing its targets within months of listing on the NZX.