Market close: Shares rise as dairy giant scheme given nod

BUSINESSDESK: New Zealand shares rose led by Heartland and the NZX, after Fonterra farmers confirmed the creation of tradable securities linked to dairy co-operative.

The NZX 50 index rose 1.92 points, or 0.5%, to 3401.12. Within the index, 21 stocks rose, 20 fell and 9 were unchanged. Turnover was about $69 million.

Farmers split their vote, saying yes to the Trading Among Shareholders scheme, with 66.45% approval, but missing the 75% nod required for constitutional changes.

The changes pave the way for tradeable, non-voting Fonterra-linked securities listed on the NZX and giving non-farmer investors limited exposure to the dairy giant for the first time.

Heartland New Zealand, the building society that wants to become a bank, rose 4% to 51 cents, while shares in the stock exchange regulator gained 3.9% to $1.29.

"Possibly part of it is the Fonterra vote," said Michael Milne, investment advisor at Craigs Investment Partners. "We are also getting closer to the start of the state-owned assets sales."

Power companies MightyRiverPower, Meridian Energy, Genesis and Solid Energy, and Air New Zealand, have been flagged for a partial sell-down in the government’s mixed ownership model, expected to kick off in the third quarter this year.

The National government has signaled the sales could free up as much as $10 billion.

Auckland International Airport, which is targeting Asian arrivals to stoke growth over the next decade, was largely unchanged on $2.42 after the airport flagged a 44.4% increase in Chinese arrivals in May, even as international passenger numbers fell 2.9% to 500,064 from the same month a year earlier.

Fisher and Paykel Healthcare, which makes breathing respirators and makes more than half its sales in US dollars, gained 0.94% to 53 cents after the New Zealand dollar fell to 78.76 US cents from 78.90 cents at 8am.

The decline was led by OceanaGold Corp, operator of the Macraes goldfield, which joined the NZX50 in September and has seesawed alongside the price of gold. Its shares fell 8% to $2.30.

"It is a volatile stock in a volatile industry," Mr Milne said. "Particularly when people have concerns about global growth, they stick to blue-chip stocks. Gold has been a wee bit out of favour."

Outdoor clothing retailer Kathmandu fell 1.4% to $1.38, while children's clothing firm Pumpkin Patch shed 1.1% to 88 cents.

The largest company on the exchange, Telecom slipped 0.65% to $1.54.