Market close: NZ shares rise, paced by Fletcher, Cavalier

BUSINESSDESK: New Zealand shares rose, paced by construction firm Fletcher Building and carpet maker Cavalier, after figures showed property values and homes sales jumped last month.

The NZX 50 Index rose 1.8 points, or 0.1%, to 3583.64. Within the index, 27 stocks rose, 15 fell and eight were unchanged. Turnover was $134 million.

The NZX 50 is near a three-month high ahead of earnings season. New Zealand’s listed companies will lift normalised profit by a median 7%, based on Forsyth Barr’s forecasts for 43 companies that it follows. Sales are expected to rise by 3.8%.

"Investors are still to a certain degree sitting on their hands waiting for results," said James Smalley, a broker at Hamilton Hindin Greene.

"Everyone has a fair idea of what the results will be but people are looking for the make-up of earnings and the comments from directors."

Fletcher Building, New Zealand's largest construction company, rose 0.8% to $6.48, stock has gained 3.3%  this year.

The company is due to report its full year results on August 22 and expected to show an 18% increase in sales and a 0.7% rise in earnings before interest depreciation amortisation to $806 million, according to Forsyth Barr.

Home sales jumped 20% last month, Real Estate Institute figures show. Property values rose 2.2% in the three months ended July 31, according to QV.

Gainers on the NZX 50 were led by Cavalier, New Zealand's only listed carpet marker, up 1.9% $1.61. Its results will be released on August 12.

Heartland New Zealand, the would-be bank, rose 1.9% to 55 cents.

Mainfreight, the biggest road transport company listed on the NZX 50 Index, was unchanged on $9.20.

It posted a 15% decline in first-quarter profit to $12.4 million in the three months ended June 30, as ailing European economies offset strong growth in sales in the rest of the world.

"The one big thing in the domestic market was the Mainfreight result," Mr Smalley said. "Investors have read between the lines and seen that other sides of the business are doing will – the stock is looking cheap."

The decline was led by Contact Energy, the biggest power company on the NZX 50, down 4% to $4.80.

Vector, the Auckland gas, electricity and telecommunications networks, dropped 2.1% to $2.74.

Xero, the cloud-based accounting platform provider, fell 1.9% to $5.20.

Shares of Telstra fell 1.6% to $5.12 after Australia’s biggest phone company posted a 5.4% gain in net profit to $A3.4 billion as sales edged up 1% to $A25.2 billion.

Shares in Horizon Energy Distribution were unchanged at $3.40 after the Bay of Plenty electricity distributer announced it had bought contract heating, ventilation and air-conditioning businesses Hastie New Zealand, Aquaheat Industries and Professional Building Services for $5.25 million.