NZ shares rise led by A2's rebound

  • 21/07/2015
NZ shares rise led by A2's rebound

By Suze Metherell

New Zealand inched higher as A2 Milk Co rebounded from a sell-off while Auckland International Airport and Steel & Tube Holdings advanced ahead of earnings season.

The S&P/NZX 50 Index rose 14.98 points, or 0.3 percent, to 5876.91. Within the index, 18 stocks rose, 22 fell and 10 were unchanged. Turnover was $80.9 million.

Investors are cautiously optimistic about the forward outlook for listed exporters ahead of the upcoming earnings season.

Companies expected to deliver stronger earnings on the back of a weaker dollar and lower interest rates, despite a slowdown in the dairy sector and a mixed outlook for an Australian economic recovery.

"We should be producing stats off what has been a pretty robust economy, which is slowing down now, but the reporting season should reflect a good solid environment," Shane Solly, director at Harbour Asset Management said.

"Clearly there's a question mark with people expecting a slowdown in parts of the New Zealand economy, and what that means. Also, what's happening with the Australian economy because a lot of New Zealand economies have substantial exposure to the Australian economy, which is still pretty mixed."

Auckland International Airport climbed 2.2 percent to $5.335, Steel & Tube advanced 1.8 percent to $2.85 while Fisher & Paykel Healthcare rose 1.6 percent to $7.42

A2 Milk Co rebounded after being the worst performer to lead the benchmark index higher, up 4 percent to 78 cents. Yesterday it said a bid by cornerstone shareholder Freedom Foods Group and US food and beverage firm Dean Foods wasn't compelling enough to get a board recommendation.

Investors are weighing the outlook for energy companies, with speculation Contact Energy's Australian parent, Origin Energy will announce the sale of its 53 percent stake sooner rather than later.

The future of the Tiwai Point aluminium smelter is said to be one of the sticking points delaying a decision by Origin. The smelter's owner pushed out a deadline to decide on the operator's future earlier this month and has until August 3.

Meridian Energy, which has the current power supply contract with Tiwai Point, advanced 0.5 percent to $2.16. Contact was the worst performer on the day, down 2 percent to $5. Genesis Energy declined 1.1 percent to $1.76. MightyRiverPower slipped 0.4 percent to $2.84.

"Some of the heat has come out of that sector, for a lot of different reasons. Clearly some of the 'gentailers' are facing some structural issues." Mr Solly said.

Spark New Zealand rose 1 percent to $2.935 and Fletcher Building fell 0.5 percent to $8.11.

On the New Zealand Alternative Index, GeoOp climbed 20 percent to 48 cents, after the workforce management app developer said it was looking to migrate to the main board.