Market close: shares hit a new five-year high as Air NZ soars
Turnover of $250m included more than 10m Trade Me shares.
Turnover of $250m included more than 10m Trade Me shares.
New Zealand shares rose to a new five-year high as investors cheered Air New Zealand's profit growth and Fletcher Building pushed back above $9.
The NZX 50 Index rose 43.68 points, or 1 percent, to 4320. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover of $250 million included more than 10 million Trade Me shares.
Air NZ climbed 4.1 percent to $1.40, a level it last reached in February 2011. The airline, which is 73 percent state-owned, posted first-half profit that more than doubled after lifting passenger volumes and boosting yields on international routes, while keeping costs in check.
"They done a lot of restructuring over the years on their long haul," says Grant Williamson, a director at Hamilton Hindin Greene. "They have turned things around very nicely. It was a great result, better than expected, and the share price has been rewarded."
Fletcher, the biggest company on the NZX 50, rose 3.2 percent to $9.15 as equity markets across Asia rallied after gains on Wall Street. Helping local sentiment, a survey today showed business confidence has gained to a 19-month high.
"The markets are remaining in a bull trend," Mr Williamson says.
Units of the Fonterra Shareholders' Fund fell 2.8 percent to $6.98 and shares of PGG Wrightson declined 2.4 percent to 40 as investors assessed the impact of drought on farming, especially dairy farming. The government yesterday declared drought in Northland and said other regions could follow.
Drought "could have a pretty big impact on milk production and manufacturing output", Mr Williamson says.
Tourism Holdings, which merged its campervan rental business with two rivals last year, fell 4.4 percent to 65 cents after cutting its annual earnings guidance on a deteriorating Australian market after posting a small first-half loss, as expected.
Vector rose 1.1 percent to $2.90 after the Commerce Commission confirmed that the gas distribution network owner will have to cut its prices by 18 percent and reduce its wholesale gas transmission charges by 29.5 percent.
Trade Me, the auction website, rose 2.7 percent to $4.93. UBS AG and various of its funds today announced changes in their holdings of the stock.
Guinness Peat Group rose 2.6 percent to 60 cents after saying it will return cash to shareholders once it beds down the transformation into its Coats unit.
Michael Hill International, the jewellery chain, gained 4 percent to $1.30 and Telecom rose 2 percent to $2.42.
Turners & Growers rose 2 percent to $1.53 after posting a $15 million fill-year loss, reflecting asset writedowns.
(BusinessDesk)