MARKET CLOSE: NZ shares rise; Sky TV up while NZ Refining falls

New Zealand shares rose as Sky Network Television gained on perceptions it may be closer to fair value after shedding a quarter of its value while New Zealand Refining dropped.

The S&P/NZX 50 Index gained 6.24 points, or 0.09 percent, to 6,909.86. Within the index, 24 stocks rose, 20 fell and six were unchanged. Turnover was $143.8 million.

Sky Network Television led the index, gaining 4.7 percent to $4.21. The stock dropped 26 percent over four sessions since May 6th after saying subscriber numbers were expected to fall further this financial year, meaning earnings next year would miss analyst estimates. It hit a six-year low of $3.98 last Friday.

"It's been under very heavy pressure and it's bouncing today although I would caution that it's on low volumes relative to when it was sold off - we'll have to see whether that's sustained or not," said Matt Goodson, managing director at Salt Funds Management, which won fund manager of the year at the 2016 Institute of Finance Professionals awards last night. "Whether it's cheap or not depends on one's future view of subscriber additions or losses, and future content costs. There are some big moving parts, which there's quite a wide disparity of views about out there in the market."

Restaurant Brands New Zealand gained 1.9 percent to $5.45, Spark New Zealand rose 1.6 percent to $3.73 and Metro Performance Glass advanced 1.6 percent to $1.89.

Ryman Healthcare rose 0.3 percent to $9.63. It posted another record full-year profit, rounding out 14 straight years of earnings growth as New Zealand's largest retirement village operator ramped up its Australian expansion and increased re-sales of occupation rights.

"It's perhaps a touch disappointing, the result itself for this year was in line but delays in consenting at their second Melbourne development suggests they may miss their development target for next year," Goodson said. "The stock, in line with all retirement village stocks, has been on a real run of late so when you've had such a strong run you do need to deliver perfection to justify it."

NZ Refining was the worst performer, down 4.3 percent to $2.44, a one-year low. It's fallen 32 percent this year, and on Tuesday said margins were squeezed by a planned shutdown of its hydrocracker unit and operational problems that needed repairing in the March/April period.

Steel & Tube Holdings fell 3.8 percent to $2.04 and Meridian Energy dropped 2.8 percent to $2.61.

A2 Milk Co declined 1.2 percent to $1.59. It responded to a 'please explain' notice from the stock market operator after its shares plunged to a five-month low, by saying it was in compliance with listing rules. Separately, brokerage First NZ Capital noted uncertainty creeping into the market as four new entrants start selling milk with the A2-type protein.

"The key reason is there are other companies now marketing their own A2-branded milk, the market has suddenly become quite concerned," Goodson said. "It'll be an interesting test of their branding and their patents, there's an element of uncertainty about their ability to earn excess returns into the future."

Outside the main index, Augusta Capital gained 0.9 percent to $1.13. It lifted annual earnings 17 percent as the listed property investor and fund manager eked out bigger returns from its two segments, with a higher occupancy rate and more syndication deals completed.

(BusinessDesk)