MARKET CLOSE: NZ shares gain on favourable earnings season

MARKET CLOSE: NZ shares gain on favourable earnings season; Nuplex gains, Telstra falls

By Jonathan Underhill

Aug. 30 (BusinessDesk) – New Zealand shares gained on a tide of rising global equities as an upbeat earnings season and companies plump with dividends lured investors back to the market. Nuplex Industries Ltd. rose and Telstra Corp. fell on a low-turnover day.

The NZX 50 Index rose 11.73, or 0.4%, to 3317.731. Within the index, 28 shares rose, 11 fell and 11 were unchanged. Turnover was a lower-than-average $74 million.

PGG Wrightson was the biggest gainer, up 6.8% to 47 cents. The rural services company wrote down the value of its wool business and a livestock supply contract, resulting in a full-year loss. Revenue gained 14% to $1.24 billion at the company controlled by China’s Agria.

Nuplex rose 4.4% to $2.85, the highest close since mid-July. The specialty chemicals company that sells its products in all major markets lifted annual profit by 3.6%, beating its guidance.

“People are pretty happy with how well they have done in a relatively tough industrial environment,” said James Lindsay, equities manager at Tyndall Investment Management.

Telstra fell 2.9% to $3.75 on the NZX after the Australian Competition and Consumer Commission said it had concerns about the phone company’s separation plans, raising the prospect that the split may be delayed.

The announcement came the same day that New Zealand Communications Minister Steven Joyce endorsed Telecom’s separation plan. Its shares fell 1.3% to $2.73. The two phone companies made the pledge to their government’s to split as part of the deal to give them the lion’s share of high speed broadband.

Telecom’s shares shed their special and final dividends of 9.5 cents tomorrow.

Bourse operator NZX Ltd., which rose 2.2% to $2.28, goes ex its interim dividend of 2.75 cents. Contact Energy Ltd. goes ex-dividend on Sept. 1 for its 12 cents a share final payment. The shares rose 1.4% to $5.27.

Argosy Property Trust fell 2.5% to 78 cents as its note holders met to vote on internalising the management contract.

Goodman Fielder Ltd., the Australasian food maker, fell 3.1% to 95 cents on the NZX as investors re-priced the stock following its write down of its bakery division, which contributed to a net loss of $167 million.

APN News & Media, the publisher of the NZ Herald newspaper, rose 5% to $1.05, having been beaten up in the wake of its asset writedown and weaker earnings.

Steel & Tube Holdings, the building supplies firm, rose 2.8% to $2.58, having managed a three-fold gain in net profit this month.

“The results season in New Zealand has been pretty good,” said James Lee, head of institutional equities at First NZ Capital. As well, New Zealand and Australia have got healthier balance sheets relative to much of the rest of the world. “It’s a pretty good place to be at the moment.”

(BusinessDesk)

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