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MARKET CLOSE: NZ shares rise; Sky TV, Smartpay gain while Chorus falls to 5-month low

Sophie Boot
Thu, 31 Aug 2017

Aug. 31 (BusinessDesk) - New Zealand shares rose, with Sky Network Television and Contact Energy gaining while Chorus hit a five-month low.

The S&P/NZX50 Index rose 41.9 points, or 0.5 percent, to 7,817.1. Within the index, 30 stocks gained, 17 fell and three were unchanged. Turnover was $179 million.

Sky Network Television led the index, rising 2.9 percent to $2.84, while Contact Energy gained 2.4 percent to $5.58 and Trade Me Group advanced 2.2 percent to $4.65.

Chorus fell 1.2 percent to $4. The shares have fallen 14 percent since their annual earnings report on Monday, when the network operator said it lifted annual profit 24 percent. However, its biggest customer Spark has eroded Chorus's customer numbers, with total fixed line connections falling 7 percent to 1.6 million and its broadband connections down 3 percent to 1.19 million.

"After their result, the last few day, in particular, there has been a fairly marked drop in share price," said Grant Davies, investment advisor at Hamilton Hindin Greene. "Certainly, it was one of the results that hasn't impressed the market and has resulted in a few downgrades. The copper network is getting cannibalised by fibre and wireless broadband, but it seems to be finding a bit of a level around $4."

Metro Performance Glass rose 1.8 percent to $1.11, continuing yesterday's recovery after hitting a record low on Wednesday. Last Thursday, the shares dropped 10 percent after the company said it expects its first-half results to be largely flat despite the contribution from recently acquired Australian Glass Group. They've now fallen 20 percent in the past week, and 43 percent this year.​ Since the first half results, Investment Services Group of whom Devon Funds Management is a subsidiary raised its holding to 9.8 percent from 8.5 percent and in an NZX disclosure today, the Accident Compensation Corp had lifted its stake to 7.4 percent from 6 percent.

"It had a bit of movement after that result, ACC adding to their stake has given the market a bit of confidence," Davies said.

SkyCity Entertainment Group, which gave up rights to a 10 cent dividend today, was the worst performer, down 2.8 percent or 11 cents to $3.80. NZX, which shed a 3 cent dividend, dropped 0.8 percent or 1 cent to $1.19.

Outside the benchmark index, Smartpay Holdings gained 9.5 percent to 23 cents. The listed payment terminal supplier is considering a proposal from Pemba Capital Partners which would see the Sydney-based investment firm buy all its shares at an 11 percent premium.

The company has received the "preliminary, indicative, non-binding and conditional proposal" from Pemba, which is offering 23.5 cents per share for all of the shares, it said in a statement to the NZX. The shares last traded at 21 cents before the offer and have gained 24 percent this year. The proposal is subject to due diligence and the majority of shareholders engaging with Pemba.

"Perhaps long suffering shareholders might finally be offered a reprieve, they've been a bit of a poor performer," Davies said.

(BusinessDesk)

Sophie Boot
Thu, 31 Aug 2017
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MARKET CLOSE: NZ shares rise; Sky TV, Smartpay gain while Chorus falls to 5-month low
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