Market close: Shares rise, paced by Telecom, Contact, NZ Refining

BUSINESSDESK: New Zealand shares rose, paced by Telecom, Contact Energy and NZ Refining in the lead-up to an earnings season some analysts say will beat estimates.

The NZX 50 Index rose 5.81 points, or 0.16%, to 3577.79. Within the index, 20 stocks rose, 18 fell and 12 were unchanged. Turnover was $96 million.

"The interesting thing about earnings season is that people expect the environment to be a bit slow and that is fine when expectations are low, but as share prices creep higher the bar goes up," said Mark Lister, head of private wealth research at Craigs Investment Partners.

The NZX 50 is near a three-month high heading into earnings season.

New Zealand’s listed companies will lift normalised profit by a median 7%, based on Forsyth Barr’s forecasts for 43 companies that it follows. Sales are expected to rise by 3.8%.

Telecom, the largest company on the exchange, rose 1.1% to $2.69. Contact Energy, the biggest power company on the NZX 50, climbed 0.6% to $4.83.

New Zealand Refining, which operates the nation’s only oil refinery, was up 0.8% to $2.37. The refinery's fees improved to an average $US4.92 a barrel in the months of May and June, up from $US4.01 in the previous two months.

That is still well below the average margins achieved at the refinery last year, when they averaged $US6.11 a barrel.

Shares in New Zealand Oil & Gas were unchanged on 82 cents. The company will receive a $5 million payment from the receivers of Pike Rive Coal after it was sold to Solid Energy in May. It expects a further payment of up to $2.5 million before the end of the year.

"Any news is good news on money coming back from Pike for them – they have a few other headwinds," Mr Lister said.

The gainers were led by OceanaGold, which operates the Macraes gold mine near Dunedin, up 3.6% to $2.87.

Turners & Growers was unchanged on $1.68 after the fruit maker posted a 2.2% increase in first-half profit to $7 million and is on track to improve its full-year operating result.

Fletcher Building, New Zealand's largest construction company, fell 1.2% to $6.40.

"You do have a few Australian investors in the New Zealand market getting downbeat about things and that does follow through to our bigger companies," Mr Lister said.

The decline was led by Heartland New Zealand, down 3.6% to 53 cents after the lender announced it expects to get from the Reserve Bank in November about whether it can have a banking licence.

Steel & Tube fell 0.5% to $2.12. The construction materials supplier reported a 23% fall in annual profit to $13.1 million as dwindling demand and stiff competition squeezed margins.