MARKET CLOSE: Shares rise as investors favour companies with good earnings prospects

New Zealand shares edged up in mixed trading as investors, eyeing an uncertain global environment, favoured stocks that recently posted strong earnings. Nuplex Industries, Ryman Healthcare and Fisher & Paykel Healthcare gained.

The NZX 50 Index advanced 2.456 points, or 0.04 percent, to 5867.897. Within the index, 13 stocks rose, 28 fell and nine were unchanged. Turnover was $119 million.

Stocks on Wall Street fell yesterday, hit by nervousness ahead of the publication of key US employment data tonight which could provide certainty about future US interest rate hikes and amid concern about Greece's ability to reach agreement with its creditors. Declining oil and gold prices also weighed on energy and materials shares, which led declines in the benchmark Standard & Poor's 500 index.

"We have got a pretty flat performance today, which is not bad considering the offshore markets last night, which fell mainly on concerns about Greece, so all in all, a pretty respectable performance from our market," said Grant Williamson, a director at Hamilton Hindin Greene. "A lot of that is on the back of Greece refusing to make a repayment on a loan and also weaker commodity and oil prices."

Nuplex Industries advanced 0.5 percent to $4.20, its highest closing price in more than five years. The stock has gained 41 percent so far this year, making it the best performer on the benchmark index.

"It's had a fantastic run following a profit upgrade a few weeks ago," said Williamson. "It's one of the better performers and a beneficiary of low oil prices as they use a lot of the by-products from oil in the manufacture of resins."

Ryman Healthcare, New Zealand's largest listed retirement village builder and operator, increased 0.9 percent to $8.23, its highest closing price in more than six weeks. The stock is extending its gain since the company posted a 24 percent jump in annual profit on May 22 and confirmed that its expansion in Melbourne, Australia, was exceeding expectations.

"Investors are just starting to pick up exactly how good that result was, especially the introduction into Australia with their first Melbourne village sold out extremely quickly and there are plans there for much more so that's a whole new avenue of growth for Ryman and investors are starting to pick up on that," Williamson said.

F&P Healthcare advanced 0.1 percent to $6.96, just shy of its record high $6.99 in April. Last month, the medical device maker reported a 17 percent gain in annual profit to $113.2 million, beating earlier forecasts, and said future earnings would rise further. A weaker kiwi dollar also stoked sentiment for the stock, increasing the value of exported earnings.

Auckland International Airport rose 1.7 percent to $4.93, leading the benchmark index higher. Spark New Zealand rose 1.2 percent to $2.89. Fletcher Building, the biggest company on the stock market, rose 0.8 percent to $8.44.

On the other side of the ledger, Pumpkin Patch dropped 3.9 percent to 25 cents, after the ailing children's clothing retailer announced it had abandoned plans to refinance or find a buyer after a number of discussions with interested parties weren't compelling enough for the board to seriously consider. The company confirmed its earnings guidance, although chairman Peter Schuyt said market conditions are expected to remain challenging and earnings may be volatile going forward.

"They are going to continue to battle on alone," said Williamson. "It's still difficult trading conditions for them."

Fellow retailers Hallenstein Glasson Holdings dropped 5.3 percent to $3.74, Kathmandu Holdings slipped 2.2 percent to $1.33 and Warehouse Group shed 1.4 percent to $2.83.

Health software developer Orion Health Group was the worst performer on the NZX 50, falling 3.6 percent to $4.57.

Outside the benchmark index, Trilogy International fell 3 percent, or 3 cents, after the skincare and candle maker shed rights to a 3.66 cents per share dividend.

Kirkcaldie and Stains jumped 4.7 percent to $2.25, extending yesterday's 28 percent gain after the unprofitable department store announced it would be taken over by Australian department store chain David Jones. The deal frees the board up to make an "early and substantial" distribution to shareholders from available cash, which is expected to exceed the recent market value of the shares.

Z Energy, the petrol station chain, declined 1.8 percent to $5.93. Investors are banking profits after the stock rose to a record $6.21 on Tuesday after the company detailed plans to buy the Caltex and Challenge brands from Chevron in a $785 million deal. Some traders may also be shedding the stock on concern the deal may struggle to gain approval from the Commerce Commission.

Pacific Edge, the cancer diagnostics company, dropped 1.5 percent to 64 cents. The company detailed plans for a $35.3 million renounceable rights offer at a 6.2 percent discount to the stock's previous traded price to fund its US growth strategy, potentially launch into Singapore as a gateway to South East Asia, and complete commercialisation of its third and fourth Cxbladder tests. Under the offer, shareholders can subscribe for two new shares for every 11 held as at June 9 for 61 cents apiece, compared with its previous traded price of 65 cents.

(BusinessDesk)