MARKET CLOSE: Shares rise; Fletcher gains as investors re-appraise beat-up stocks

New Zealand shares rose, paced by Fletcher Building, as investors were drawn to companies that have under-performed the benchmark index while eschewing those that led its recent rallies, including Meridian Energy and MightyRiverPower.

The NZX 50 Index rose 2.809 points, or 0.04 percent, to 5911.397. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $121 million.

Fletcher Building rose 1.7 percent to $8.97. The nation's biggest construction and building products company has fallen 6.4 percent in the past 12 months while the NZX 50 gained 16 percent. Meridian Energy fell 1.6 percent to $2.13, having soared 101 percent in the past 12 months, while MightyRiverPower fell 2.8 percent to $3.255, denting a 12-month gain of 63 percent. Chorus, the network company, rose 0.9 percent to $2.94 and has advanced 76 percent in the past 12 months.

"Fletcher Building has been an under-performer," said Grant Williamson, a director at Hamilton Hindin Greene. "Maybe investors think it has got good upside potential."

He said Meridian is likely to decline as the May deadline looms for the second payment on its installment receipts "as people sell down to pay the balance or decide to take profits."

Fonterra Shareholders' Fund units rose 1 percent to $5.89 after the world's largest dairy export said it had acquired 18.8 percent of Shenzen-listed Beingmate Baby & Child Food to cement a partnership that will sell infant formula into China.

"Investors view that as extremely positive for Fonterra in the bigger picture," Williamson said. "That they're tying up with a very large Chinese manufacturer is a pretty strategic investment for them."

Williamson said overall, investors want to see further earnings gains to help drive the benchmark index higher from already-historic levels.

"In the New Zealand market, earnings do need to show some good, solid improvement to warrant these higher share prices - investors are comfortable that this is going to happen," he said.

Tower rose 2.2 percent to $2.36 after the insurer it doesn't expect to be affected by Cyclone Pam in the Pacific Islands

A2 Milk Co advanced 1.9 percent to 55 cents. The milk marketing company is chasing a dual-listing across the Tasman and has issued an information memorandum to would-be Australian investors after gaining preliminary approval to list on the Australian stock exchange.

​On the New Zealand Alternative Index, Pushpay Holdings rose 5.6 percent to $3.80. The mobile payment app developer has secured a $4 million funding line from cornerstone shareholder, the Huljich family, as it chases earnings growth in the US.

(BusinessDesk)