MARKET CLOSE: Shares rise in volatile day; Spark surges; ANZ, Westpac drop

New Zealand shares were mixed as weak offshore sentiment overshadowed the local earnings season. Spark New Zealand surged after annual profit beat expectations, while Freightways and Westpac Banking Corp dropped amid global volatility. Trade Me Group shares jumped on better-than-expected earnings.

The S&P/NZX 50 Index rose 8.73 points, or 0.2 percent, to 5751.19. Within the index, 25 stocks fell, 14 rose and 11 were unchanged. Turnover was $174 million. 

Spark led the benchmark index higher, jumping 9.4 percent to a four-month high of $3.02 after the telecommunications company signalled plans to pay bigger dividends as it starts chasing revenue growth for the first time in six years. In reporting improved underlying earnings, the Auckland-based company's board today announced a final dividend of 11 cents per share, taking the annual payout to 20 cents, ahead of the 18 cents expected by analysts, and signalled plans to raise that again to 22 cents in the 2016 financial year. A 3cps special dividend is also scheduled for the 2016 financial year.

"Spark with its dividend announcement is getting support," said Shane Solly, director at Harbour Asset Management.

Trade Me Group, the online auction site, rose 8.7 percent to $3.49, after extending yesterday's gains and posting better-than-expected earnings, Solly said.

Markets across Asia fell amid concern about China’s slowing economic growth and its impact on the world economy. In China, the Shanghai Composite Index dropped 3 percent in afternoon trading, Japan's Nikkei 225 Index declined 2.4 percent and Australia's S&P/ASX 200 Index fell 2 percent. 

The offshore jitters flowed through to the local bourse, weighing on dual-listed stocks and companies which are seen as bellwethers for the local economy. Westpac dropped 5.1 percent to $34.27. Australia New Zealand Banking Group declined 4.9 percent to $31. Freightways, the courier and logistics firm, fell 2.3 percent to $5.51. Port of Tauranga declined 2 percent to $17.05.

"The big news on the day is very much about what is happening globally and we are seeing people becoming more concerned about global growth and the impact that has on emerging markets," Solly said. "People are thinking about what is happening in the New Zealand economy."

Sky Network Television declined 4.4 percent to $5.38.  New Zealand's dominant pay-TV company boosted annual profit 6.4 percent to $171.8 million as it reaped more revenue from fewer customers. The result was lower than the $177.7 million profit expected by analysts in a Reuters poll. The company is facing an increasingly competitive and changing environment where local rivals are sending content through the fast-internet service, including Spark's Lightbox play, Netflix, and Sky offerings like Neon TV, Igloo and Fanpass.

"Sky TV is under the pump. That result was ok," Solly said. "But similar pay-TV businesses get really knocked around with a view about the increased cord-cutting - which is people moving off TV."

Skellerup Holdings, the industrial rubber firm, advanced 1.6 percent to $1.30. Utility company Genesis Energy gained 2.8 percent to $1.81. MightyRiverPower advanced 1.5 percent to $2.77. Contact Energy, with a share register now wide open after Origin Energy's exit earlier this month, fell 0.9 percent to $5.29, still well above the $4.65 a share at which Origin sold out.

NZX, the stock market operator, declined 2.8 percent to $1.03. SkyCity Entertainment Group, the casino operator, fell 2.5 percent to $3.96.

(BusinessDesk)