MARKET CLOSE: Shares rise paced by Spark; NZOG falls on suspended dividend

New Zealand shares rose paced by Spark New Zealand on the promise its transformation was underway. New Zealand Oil and Gas fell as investors mulled the suspension of dividends in the near term.

The NZX 50 Index rose 21.254 points, or 0.4 percent, to 5483.997. Within the index, 20 stocks rose, 19 fell and 11 were unchanged. Turnover was $127.5 million.

Spark advanced 2.5 percent to $3.27 and has gained 20 percent in the past six months, in part fuelled by a global hunt for yield paying equities. The company rebranded as Spark earlier in the year, as part of its transition away from its bread-and-butter telecommunications business to a more diverse media and data driven digital-services business. At its annual meeting last week it said it was entering into its second phase of its transformation.

"Spark has really been re-rated by the market quite strongly over the last number of months," said Grant Williamson, director at Hamilton Hindin Greene. "There are a couple of reasons, and yield is one. Out of their AGM there were some pretty positive comments, where they've really been through a consolidation period and the company is poised for earnings growth."

New Zealand Oil & Gas was the worst performer on the benchmark index falling 2.8 percent to 70 cents. The listed energy explorer will return about $60 million to shareholders saying cash on hand will be more than it needs to grow its business as production ramps up at the Tui field. The company paid a final dividend of 3 cents a share in September but doesn't expect to declare any more dividends "in the near term" because it is deducting exploration expenses from its tax bill and isn't accruing imputation credits.

"Initially the price went up on the back of directors were considering a 15 cent capital return to shareholders, however the negative side has really taken over, being they don't intend to pay any more dividends in the foreseeable future," Williamson said. "Investors were actually in New Zealand Oil & Gas for the income because they were paying reasonable dividends."

Energy generators and retailers were mixed, after strong gains in recent times. Genesis Energy rose 1.4 percent to $2.16. MightyRiverPower gained 0.5 percent to $3.04. Meridian Energy fell 0.9 percent to $1.68. Contact Energy declined 0.5 percent to $6.25.

"Some of the strong buying we've seen in the electricity generators in recent times may just be starting to wane a little bit," Williamson said.

Steel & Tube rose 0.3 percent to $2.97. The steel building products manufacturer expects full-year revenue to increase 13 percent to $500 million as its stainless steel acquisition boosts earnings, while the wider trading environment remains competitive as falling dairy prices and a high New Zealand dollar weigh on key sectors.

"It was reasonably positive comments, although they are maybe seeing things slow a little bit in the last couple of months," said Williamson. "They seem to have bedded down that acquisition quite nicely."

New Zealand Refining climbed 3.8 percent to $1.92. The company, which operates the Marsden Point refinery, expects to be more competitive as margins improve with the falling price of crude oil, and has almost repaid the outstanding processing fees it charged its shareholding customers that was triggered by a downturn in refining margins.

Z Energy, the petrol pump chain which has a 15 percent stake in NZ Refining, led the benchmark index higher rising 3.3 percent to $4.39.

Air New Zealand advanced 2.9 percent to $2.145. The nation's carrier, which has an effective monopoly on New Zealand's regional routes, announced earlier this week it is ditching seven of those regional routes saying the cost of running its fleet of 19-seat aircraft has cost it more than $1 million a month over the past two years.

Units in Fonterra Shareholders' Fund rose 0.7 percent to $6.16. The fund, which gives outside investors exposure to Fonterra's earnings, should be able to raise its 2015 dividend forecast given it expects to pay farmers less for their milk, reducing its input costs, a unit holder told the fund's annual meeting in Auckland.

Metlifecare rose 0.9 percent to $4.37 after the retirement village operator appointed SkyCity Entertainment Group executive Richard Callander to its senior management team.

Fletcher Building, the country's largest listed company, was unchanged at $8.46.

On the NZAX, Pushpay Holdings was unchanged at $2.35 and has gained 135 percent since its compliance listing in August. The mobile payment app developer widened its loss in the first-half to $2.7 million as it invested in new products and chased sales in its key US market. The Auckland-based company said at Sept. 30 it had cash and cash equivalents of $5.5 million and no bank debt, which it said was sufficient to "maintain its growth trajectory in the near term".

(BusinessDesk)