MARKET CLOSE NZ shares rise, Z Energy joins NZX50

New Zealand shares rose along with other global markets on optimism US politicians are moving closer to resolving a stalemate that has caused a partial government shutdown and the possibility of a debt default looming.

The NZX 50 Index gained 23.390 points, or 0.5 percent, to 4740.770. Within the index, 37 stocks gained, seven fell and six were unchanged, on low turnover of $81 million. New Zealand's gains lagged a rally on Wall Street and a 1.7 percent jump in the S&P/ASX 200 Index, possibly showing New Zealand investors were selling stocks to raise funds to buy shares in Meridian Energy next week.

"It was a positive day, moving up half a percent, in reaction to what has been happening offshore with negotiations in Washington getting closer to finding a resolution to the shutdown and raising the debt ceiling," said Grant Williamson, a director at Hamilton Hindin Greene." That has given the markets a bit of a boost with investors a little bit more confident that things will be resolved in the US pretty quickly.

"We hope that Washington will see some sort of resolution maybe over the weekend."

Deadlines next Thursday, Oct 17, are crucial in the process.

After the 5pm market close, the NZX said petrol station chain Z Energy will be added to the benchmark index from Oct. 21, having met the ranking and liquidity requirements for inclusion. Children's clothing retailer Pumpkin Patch, the lowest ranked stock on the index, will be removed. Investment funds which track the index will need to reweight their holdings to match the changes.

Michael Hill International, the jewellery chain that bears its founder's name, closed unchanged at $1.43. The company said it increased revenue 8.7 percent to A$98.5 million in the first quarter as sales improved in its largest market in Australia and jumped in Canada, while momentum slowed in New Zealand. Sales at stores open more than 12 months rose 3.8 percent to A$91.7 million, it said.

"It was another nice result from Michael Hill, they seem to have a good formula and just continue to grow," Williamson said. "Michael Hill has found it a little bit tough in the New Zealand market but it shows a bit of diversification across different countries can certainly counter one bad market not firing."

Diligent Board Member Services, the software firm fined and censured by the stock exchange for a raft of breaches, slumped 14 percent to $4.87 after it said sales growth slowed in the third quarter. Diligent, which develops governance software, said it increased its cash balance by US$8.4 million to US$47.4 million in the three months ended Sept. 30, a period when it signed 122 net new client agreements compared to 168 a year earlier.

Diligent released a truncated quarterly update as it continues to work on restating its books for the past three financial years after a series of administrative failings led to the firm recognising revenue too early.

"It shows that their new sales growth is slowing," Williamson said. "Investors have taken that on board and decided to sell the stock off. Confidence has waned a little bit with Diligent for a while now and this is maybe just another catalyst to sell, and the fact that they still haven't managed to reinstate their yearly financial accounts."

Comvita, which produces health products from manuka honey, was unchanged at $3.95. The company turned to a loss in the first half on increased price competition in Australia and the UK and concern over New Zealand food safety in Hong Kong. It expects to make up the difference in the second half to post a higher annual profit.

Comvita reported a loss of about $1 million in the six months ended Sept. 30, from a profit of $2.4 million in the year-earlier period. Sales slipped to $43.3 million from $45.4 million during the same period, it said. The interim figures will be confirmed Nov. 28.

(BusinessDesk)