MARKET CLOSE: NZX50 rises to 2-month high; Heartland, Fonterra Fund, Summerset gain

New Zealand shares rose, pushing the S&P/NZX 50 Index to the highest in more than two months, as the rebound in dairy prices, relatively low kiwi dollar and rising house prices lifted sentiment for the economic outlook. Heartland New Zealand, Fonterra Shareholders' Fund and Summerset Group gained.

The S&P/NZX 50 Index rose 14.82 points, or 0.3 percent, to 5834.83. Within the index, 35 stocks rose, six fell and nine were unchanged. Turnover was $123 million.

Dairy prices have climbed about 63 percent from their low of early August, based on the GlobalDairyTrade price index and traders will be watching this week's auction for any signs the rally is running out of puff. The kiwi dollar is trading near a four-month high at 68.11 US cents, but is down about 23 percent from its highs of November 2014, when it touched 88.35 cents, easing the pressure on exporters bringing home their offshore sales and helping tourist businesses.

"The New Zealand economy has done pretty well," said Tim Kronfeld, senior dealer at OMF. "Dairy prices have come back and the lower kiwi dollar is good for exporters and tourist-related businesses." Meanwhile, households are feeling better off in the face of rising property values and low mortgage rates.

Fonterra Fund units rose 0.9 percent to $5.40 and have climbed from as low as $4.58 in June. A2 Milk, which markets milk with a protein variant said to have health benefits, was unchanged at 77 cents and have gained from 46 cents in February. Synlait Milk was unchanged at $2.40, up from $2.04 in late August.

Heartland New Zealand rose 2.5 percent to $1.23, leading the benchmark index hgigher. In August, the listed lender posted a 34 percent gain in full-year profit and affirmed its guidance for 2016 earnings to rise as much as 15 percent. Heartland is in a bidding war with Turners for a cornerstone stake in auto finance company Motor Trade Finances.

Summerset Group led gains among retirement village operators, rising 1.8 percent to $3.88. Ryman Healthcare rose 1.6 percent to $7.60 and Metlifecare gained 0.2 percent to $4.26.

Goodman Property Trust rose 0.8 percent to $1.20 after completing the final leg of this year's refinancing, a new $157 million facility for its joint venture with Singapore's GIC. Precinct Properties NZ rose 1.3 percent to $1.205 and Kiwi Property Group climbed 0.8 percent to $1.335. Argosy Property rose 0.9 percent to $1.085.

Steel & Tube Holdings, the building supplies company, rose 1.5 percent to $2.72 and Fletcher Building was up 0.1 percent to $7.25.

Chorus rose 1.1 percent to $2.78 after the telecommunications network operator said increased broadband connections 0.9 percent in the September quarter as more customers switched to higher-speed fibre products.

Auckland International Airport edged up 0.1 percent to $5.10.

Outside the NZX 50, Moa Group rose 5.4 percent to 39 cents after the listed beer maker said its first-half loss narrowed after the listed beer company lifted the volume and value of sales and improved its gross margin.

Veritas Investments dropped 5.7 percent after the food and beverage investor said chief financial officer Adrienne Roberts has resigned, just a year and a half after being appointed to the role.

(BusinessDesk)