MARKET CLOSE: Shares rise; Z Energy gains on falling oil prices

New Zealand shares rose, paced by Z Energy as falling oil prices reduced its input costs. Chorus, the network operator, extended gains on the prospect of charging more for its copper lines.

The NZX 50 Index rose 12.887 points, or 0.2 percent, to 5514.954. Within the index, 22 stocks rose, 21 fell and seven were unchanged. Turnover was $149 million.

Oil prices, which have come under pressure as too much supply weighs on the price, dropped further earlier this week after the Organisation of the Petroleum Exporting Countries downgraded its forecast for 2015 global demand to the lowest level in 12 years, while Saudi Arabia's oil minister maintained the nation's resistance to cutting output.

Z Energy, the service station chain, advanced 3.3 percent to $4.43.

"Intuitively with petrol pricing coming down, you're seeing increases in the volume," said James Smalley, director at Hamilton Hindin Greene. "The market is seeing the potential for Z to really benefit from this low petrol, low oil price environment."

Air New Zealand, the national carrier, gained 3.4 percent to $2.47, and has flagged cheaper jet fuel may boost earnings. The airline announced a new direct route to South America.

Chorus advanced 1.5 percent to $2.65. Last week the Commerce Commission lifted the rate the network infrastructure operator can charge telecommunications businesses for use of its regulated copper lines.

"It roared up last week on the back of the Commerce Commission's draft ruling, it's come in for a little bit of profit taking but it looks like the buyers are back in today," Smalley said.

Spark New Zealand, Chorus's biggest customer, fell 2.5 percent to $3.09, as the outlook for rising costs weighed on investors' minds.

Precinct Properties New Zealand rose 2.2 percent to $1.14. The property investor, which has increasingly been focusing on Auckland office space, has set the interest rate for its $75 million bond issue, which it will use to repay bank debt, at 5.54 percent per annum.

Meridian Energy fell 0.6 percent to $1.79 after the partially privatised electricity generator and retailer abandoned plans for a Queensland hydro power project, blaming the "destabilising revisions" in the Australian Federal Government's renewable energy policy.

Restaurant Brands climbed 2.2 percent to $1.14 after the nation's largest fast food operator lifted third quarter sales 6.4 percent as an increase in revenue at its KFC stores offset falling sales at its Carl's Jr burger chain.

Outside the benchmark index, Blis Technologies was unchanged at 2.1 cents. The biotech company has been ordered to pay $30,000 plus costs for breaching continuous disclosure rules when chief executive Barry Richardson was caught on the fly in an interview with the Sunday Star-Times newspaper in August.

Rakon climbed 3 percent to 34 cents after the high-tech components manufacturer sold its Lincoln, UK plant for 900,000 British pounds, most of which will go into repaying debt, as part of a plan to send more manufacturing work back to New Zealand.

Mowbray Collectables was unchanged at 30 cents after the unprofitable listed auction house business put its stamp, coin and bank note trading businesses, Mowbray Bethunes and Wildlife Philatelic, up for sale in a bid to enhance shareholder value and reposition the company.

Acurity Health Group was unchanged at $5.881. Late yesterday, the Commerce Commission turned down an application by its three biggest shareholders to take over the private hospital operator, saying it would leave the group as the "only significant provider in the greater Wellington region" for some procedures.

On the New Zealand Alternative Index, Chatham Rock Phosphate fell 2.6 percent to 18.5 cents. The Environmental Protection Agency's decision-making committee considering the consent for the would-be phosphate miner has closed its hearing, and is expected to make a ruling on the project next month.

(BusinessDesk)