Market close: shares rise - Auckland Airport, SkyCity, Fletcher gain

New Zealand shares rose, pushing the NZX 50 Index to a new two-month high as Auckland International Airport announced increased traffic with Asia, SkyCity Entertainment rose and Fletcher Building benefited from offshore interest.

The NZX 50 gained 33.076 points, or 0.7 percent, to 4556.767. Within the index, 20 stocks rose, 17 fell and 13 were unchanged. Turnover was $91.6 million.

Auckland Airport, the nation's busiest gateway, climbed 3.5 percent to $3.09 after saying China Southern Airlines is increasing flights on Guangzhou to Auckland route. That follows the announcement last week that Malaysia Airlines would begin seasonal daily flights.

The stock is trading at 23.2 times forecast earnings, according to Reuters data.

The news about more Asian flights "is another tick in the box" for the airport, says Rickey Ward, equities manager at Tyndall Investment Management. Still, the airport "is trading at very high multiples".

SkyCity, which has inked a heads of agreement with the government over its deal to build an Auckland convention centre in exchange for increased gambling concessions, rose 2.6 percent to $4.38.

Fletcher Building, the construction and building products group, gained 1.8 percent to $8.66.

Mr Ward says while local investors are concerned earnings may be disappointing because of a slower Australian market, "international investors are tending to look through this weaker period".

Xero, the cloud-based accounting company, rose 2.3 percent to $17.80. The shares have risen almost 1900 percent in the past five years, though it is yet to make a profit.

"Most rational people believe it is almost farcical," Mr Ward says. "They don't understand how to value it."

Ryman Healthcare rose 0.7 percent to $6.85, a record high. Rival retirement village operator Summerset Group gained 1 percent to $3, extending its gains since the company reported strong sales growth this week.

Retailers were generally weaker. Kathmandu, the outdoor equipment chain, fell 3.7 percent to $2.60, Michael Hill International dropped 1.5 percent to $1.31 and Warehouse Group slid 1.1 percent to $3.75. Hallenstein Glasson Holdings declined 0.2 percent to $4.97.

"The retail sector is ripe for issuing some more negative news," Mr Ward says.

Air New Zealand was unchanged at $1.44 after the national carrier's bid for a five-year extension to its alliance with Virgin Australia was trimmed to three years by the Australian Competition and Consumer Commission in a draft decision. The Australian anti-trust regulator wants to impose conditions on some routes.

Units in the Fonterra Shareholders' Fund fell 0.3 percent to $7.35 after Fonterra said milk collection was down 12 percent to 8.4 million kilograms of milk solids in June from a year earlier.

NZX was unchanged at $1.35 after the latest addition to the stock market, Synlait Milk, said it will sell shares at $2.20 apiece, valuing it at $322 million. The Rakaia-based milk processor will join the stock exchange on July 23.

NZAX-listed Chatham Rock Phosphate gained 2.9 percent to 35 cents after the company yesterday lodged an application under the Exclusive Economic Zone regime to proceed with plans to mine for phosphate on the Chatham Rise.

(BusinessDesk)