MARKET CLOSE: Shares rise, Z Energy & Ebos gain while SkyTV keeps falling

New Zealand shares rose, joining a global rally in stocks after China's central bank took steps to further stimulate the world's second-biggest economy and boosting investors' appetite for risk-sensitive assets. Z Energy and Ebos Group gained, while Sky Network Television extended its decline.

The S&P/NZX 50 gained 50.03 points, or 0.8 percent, to 6,280.9. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $154.5 million.

Global equity markets rallied after the People's Bank of China lowered the amount of cash banks have to hold as reserves in an effort to limit the effects of a slowing Chinese economy. Stocks across Asia followed Wall Street and European markets higher, with China's Shanghai Composite index up 0.2 percent in afternoon trading, Hong Kong's Hang Seng gaining 0.6 percent, and Australia's S&P/NZX 200 index rising 0.8 percent.

"There's reasonable volume and the market's a bit firmer, it's clearly taking the lead from overnight," said Rickey Ward of JBWere New Zealand Equities.

Z Energy led the local index, up 3.5 percent to $6.49. The petrol station chain didn't report earnings in February as it has a March balance date, but yesterday afternoon reported Goldman Sachs had upped its shareholding to 7.9 percent, from 6.7 percent. Oil prices gained overnight, bolstered by Saudi Arabia's promise to cooperate with other producers to help stabilise prices.

Fisher & Paykel Healthcare Corp gained 3.4 percent to $9.10. As an exporter, the breathing mask and respirator maker is exposed to the global economy.

Animal & Healthcare company Ebos Group rose 3.1 percent. The stock has risen 12 percent since last Wednesday, when the company reported a 19 percent gain in first-half profit, declared a bigger-than-expected dividend and reiterated its expectation for double-digit full-year earnings growth.

Orion Health Group advanced 3 percent to $3.13. Orion has gained 26 percent since Friday, when it announced a deal to provide its Amadeus platform to Nasdaq-listed Cognizant Group. The contract has the potential to triple the number of patients it reaches, boosting a metric it says is increasingly used to value businesses in the healthcare sector. Shares of the unprofitable company have declined 55 percent since listing in November 2014 as Orion Health chases sales growth in lieu of profits.

Auckland International Airport gained 3 percent to $6.28, while Spark New Zealand rose 2.5 percent to $3.525.

Sky TV was the biggest loser on the index, falling 3.3 percent to $4.17. Its shares have dropped 9.3 percent since last Friday when the pay-TV operator posted a 5.8 percent decline in first-half profit, as the cost of securing content rose in an increasingly competitive market. The stock is rated an average 'hold' based on six analyst recommendations compiled by Reuters, with a median target price of $4.76

JBWere's Ward said the results came as Sky TV loses its hold on premium content with the introduction of online streaming video services such as Netflix and Spark New Zealand's Lightbox offering, and investors are concerned about future earnings. Television New Zealand's first-half report today showed the state-owned broadcaster has ramped up its spending on securing programming rights.

"People are talking about the result, and trying to guess what the guidance means for second half earnings," Ward said. "That seems to be the area of concern, which is why we've seen the share price drift a bit."

Precinct Properties slipped 2.4 percent to $1.21, and Fletcher Building lost 1.7 percent to $7.03.

Investors were kept busy by an onslaught of earnings at the end of February, Ward said, and are now getting a chance to go through results more thoroughly.

"The ones that are noticeably weaker, in a market that's a bit firmer, is anything that's got a bit of Australian ownership," Ward said. "It feels like that's directing the movement in the share price for Fletcher and Sky TV, which are owned by Australian or international investors."

Meridian Energy was unchanged at $2.48. New Zealand's largest hydro electricity generator and wind farm operator plans to raise as much as $150 million through seven-year bonds, taking advantage of record low interest rates.

Outside the benchmark index, Mercantile Investments gained 3.7 percent to 14 cents. The investment vehicle of veteran corporate raider Ron Brierley posted a 34 percent drop in first-half profit as share payments, loan impairments and tax ate into dividend returns and an uplift in its stock portfolio.

Pumpkin Patch was unchanged at 10 cents, with shares down 17 percent since the start of the year. The children's clothing retailer is blaming adverse currency movements and further declines in its international wholesale business as it warns profit for the first half of the year will be just a fifth of what it achieved a year earlier. Further details, including additional provisioning for the closure of loss-making stores, will emerge when half-year results are published on March 21.

(BusinessDesk)