NZ stocks gain in muted response to South Island quake

Monday 14 November 2016 11:30 AM

NZ stocks gain in muted response to South Island quake

By Paul McBeth

Nov. 14 (BusinessDesk) - New Zealand shares rose in a subdued response to the 7.5 magnitude earthquake in the upper South Island that's claimed two lives and brought Wellington's CBD to a standstill.

The S&P/NZX 50 index increased 32.11 points, or 0.5 percent, to 6729.64 as at 11am. Within in the index 13 stocks gained, 16 fell, and 22 were unchanged. Turnover was $32 million.

The quake has shut off the town of Hanmer Springs in the South Island, closed Wellington's CBD as authorities assess damage caused to various buildings, and suspended some rail and ferry services across the country. The kiwi dollar fell when the New Zealand market opened, and recently traded at 71.29 US cents.

Construction company Fletcher Building was among the stocks to gain, rising 2.5 percent to $10.38 with the firm likely to be a beneficiary from any extra work that comes from damage caused by the quake, and also from extra export revenue achieved from a weaker currency.

"Overall I expected a softer open to the market - maybe a lot of investors, with very little volumes going through, maybe too concerned about other things to be worried about their share portfolios," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "Fletcher Building will be a benefactor of whatever needs to be repaired and fixed."

Listed property investor Precinct Properties New Zealand, which has six buildings in Wellington plus the Bowen Campus under redevelopment, was quick to put out notice to the NZX before trading began, saying "while no major damage has been reported based on external visual inspections, thorough inspections are underway to assess whether any damage to the Wellington portfolio has occurred." The shares rose 0.9 percent to $1.19.

Kiwi Property Group, which owns four properties in Wellington, said it has structural engineers inspecting those buildings and has opened malls in Palmerston North and Christchurch, while Argosy Property said there was only "limited and superficial damage" to its Wellington portfolio. Kiwi Property shares fell 0.7 percent to $1.385 and Argosy shares were unchanged at $1.005.

Investore Property said there was was damage at its Countdown store in Blenheim, which will stay closed today, but its other sites in Wellington and Nelson don't appear to have suffered structural damage. The shares were unchanged at $1.40.

Hamilton Hindin Greene's Williamson said he would have expected the property stocks to have come under more pressure, and that might come when international markets open.

New Zealand King Salmon shares were unchanged at $1.05 after the fish farmer said it cancelled harvest operations today due to the tsunami warning.

Insurer Tower's shares fell 9.4 percent to 77 cents.

(BusinessDesk)

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