MARKET CLOSE: Shares gain; Z rises after selloff slump, Infratil drops

New Zealand shares rose, lifting the NZX 50 Index from the lowest level in almost a month, on perceptions the market has become less over-valued after two quarters of decline. Z Energy rose, having slumped yesterday as 30 percent of the company changed hands. Infratil fell to its lowest in more than eight months.

The S&P/NZX 50 Index rose 8.07 points, or 0.1 percent, to 5593.50. Within the benchmark index, 24 stocks rose, 15 fell and 11 were unchanged. Turnover was $151 million.

Z, the transport fuel distributor and retailer, rose 2.2 percent to $5.94, having fallen 12 percent yesterday, when Infratil sold its 20 percent stake and the New Zealand Superannuation Fund halved its stake to 10 percent at $6 a share. Z, which is seeking antitrust clearance to acquire Chevron's Caltex petrol chain in New Zealand, had reached a record $6.68 this week.

"The valuation of Z is very much two-pronged on whether they get the Caltex acquisition up or not," said Matthew Goodson, managing director at Salt Funds Management. "The general market view is they are more likely to get it than not. You can get quite strong valuations on that basis."

Goodson said even though the NZX 50 fell 3.5 percent in the third quarter, the pullback was "global in nature" the local bourse actually managed a significant outperformance of major equity benchmarks.

"We had been concerned about valuations in the market and they're still not cheap," he said. "But obviously bond yields remain very low and valuations are not as stretched."

Nuplex Industries rose 3.4 percent to $3.97, leading gainers on the benchmark index. Coats Group gained 2.3 percent to 65.5 cents and Skellerup Holdings rose 2.3 percent to $1.33.

SkyCity Entertainment Group rose 1.9 percent to $3.80 and New Zealand Refining rose 1.8 percent to $3.40.

A2 Milk rose 1.4 percent to 71 cents while the Fonterra Shareholders' Fund fell 1.5 percent to $5.25. Whole milk powder futures on the NZX are pointing to a jump of about 17 percent in prices at next week's GlobalDairyTrade auction, which would be the fourth straight gain.

Infratil declined 2.2 percent to $2.945, the lowest close since mid-January. The Wellington-based infrastructure investor booked a $392 million profit from the sale of its Z stake and also announced this week it would raise as much as $150 million in a sale of eight-year infrastructure bonds.

"People are a little concerned about what they will spend it on," Goodson said. There has been speculation Infratil could be interested in Stockland's A$1.1 billion retirement village business in Australia, he said. Infratil is also participating in the sales process for Melbourne-based renewable energy group Pacific Hydro.

Outside of the benchmark index, TruScreen fell 1.9 percent to 26 cents after the NZAX-listed cervical cancer test developer said annual sales won't be as big as previously forecast, due to a delay in the commercial launch of an upgraded screening device.

(BusinessDesk)