Article – BusinessDesk
Feb. 28 (BusinessDesk) New Zealand shares rose to a new five-year high as investors cheered Air New Zealands profit growth and Fletcher Building pushed back above $9.
MARKET CLOSE: NZ shares rise to new 5-year high; Air NZ jumps
Feb. 28 (BusinessDesk) – New Zealand shares rose to a new five-year high as investors cheered Air New Zealand’s profit growth and Fletcher Building pushed back above $9.
The NZX 50 Index rose 43.68 points, or 1 percent, to 4320. Within the index, 25 stocks rose, 15 fell and 10 were unchanged. Turnover of $250 million included more than 10 million Trade Me shares.
Air NZ climbed 4.1 percent to $1.40, a level it last reached in February 2011. The airline, which is 73 percent state-owned, posted first-half profit that more than doubled after lifting passenger volumes and boosting yields on international routes, while keeping costs in check.
“They done a lot of restructuring over the years on their long haul,” said Grant Williamson, a director at Hamilton Hindin Greene. “They have turned things around very nicely. It was a great result, better than expected, and the share price has been rewarded.”
Fletcher, the biggest company on the NZX 50, rose 3.2 percent to $9.15 as equity markets across Asia rallied following gains on Wall Street. Helping local sentiment, a survey today showed business confidence has gained to a 19-month high.
“The markets are remaining in a bull trend,” Williamson said.
Units of the Fonterra Shareholders’ Fund fell 2.8 percent to $6.98 and shares of PGG Wrightson declined 2.4 percent to 40 as investors assessed the impact of drought on farming, especially dairy farming. The government yesterday declared drought in Northland and said other regions could follow.
Drought “could have a pretty big impact on milk production and manufacturing output,” Williamson said.
Tourism Holdings, which merged its campervan rental business with two rivals last year, fell 4.4 percent to 65 cents after cutting its annual earnings guidance on a deteriorating Australian market after posting a small first-half loss as expected.
Vector rose 1.1 percent to $2.90 after the Commerce Commission confirmed that the gas distribution network owner will have to cut its prices by 18 percent, and cut its wholesale gas transmission charges by 29.5 percent.
Trade Me, the auction website, rose 2.7 percent to $4.93. UBS AG and various of its funds today announced changes in their holdings of the stock.
Guinness Peat Group rose 2.6 percent to 60 cents after saying it will return cash to shareholders once it beds down the transformation into its Coats unit.
Michael Hill International, the jewellery chain, gained 4 percent to $1.30 and Telecom rose 2 percent to $2.42.
Turners & Growers rose 2 percent to $1.53 after posting a $15 million fill-year loss, reflecting asset writedowns.