Saturday, 16 Oct 2021

Market close: NZ shares post strong gain on back of Auckland Airport support

The New Zealand sharemarket rallied strongly, posting more than a 1 per cent gain, with Auckland International Airport attracting solid buying support from passive investment funds as it increases its presence on a world global index.

The S&P/NZX 50 Index climbed all day, increasing 155.96 points or 1.19 per cent to 13,275.76 on volume of 48.31 million share transactions worth $220.57 million. There were 92 gainers and 51 decliners across the whole market.

On the last (New Zealand) trading day before the S&P Global Infrastructure Index is rebalanced, Auckland International Airport increased 13.5c or 1.76 per cent to $7.82 with 4.45m shares worth $34.81m changing hands.

The Auckland airport is the only local representative in the index designed to track 75 companies from the listed infrastructure industry. And based on liquidity and tradability, the airport will achieve a higher index weighting, above its present 2.2 per cent. Since the last review, the airport’s market capitalisation has increased from $10.84 billion to $11.5b.

Matt Goodson, managing director of Salt Funds Management, said United States shares were flat, bond yields were flat and “maybe our market was stronger through end of quarter enthusiasm.”

Market leader Fisher and Paykel Healthcare rebounded 76c or 2.43 per cent to $32; Mainfreight was up 51c to $96.90; Ebos Group increased 25c to $35.30; Chorus picked up 6.5c to $6.60; Spark collected 4.5c to $4.78; and Port of Tauranga recovered 20c or 2.9 per cent to $7.10.

The power companies and banks were stronger. Contact Energy gained 15c or 1.81 per cent to $8.45; Mercury was up 14c or 2.2 per cent to $6.50; Genesis increased 5.5c to $3.295; ANZ Banking Group rose 61c or 2.12 per cent to $29.33; and Westpac Banking Corporation collected 88c or 3.35 per cent to $27.16.

The a2 Milk Company continued its recovery, rising 26c or 4.21 per cent to $6.43. Goodson said there is a school of thought that possibly a2 Milk is past the worst and there is still strong underlying demand for its product in China.

“There was initial speculation that a2 Milk would fall out of the MSCI Index, but now some people think it will stay in – and tens of millions dollars worth of the stock has been sold short. It’s quite an interesting counter-trend, and we will know later next month after the index’s pricing period.”

Summerset Group Holdings increased 19c to $15.19 after buying its fifth Melbourne property – the 183ha Oakleigh South site overlooking the Metropolitan golf course in the sandbelt. Fellow retirement village operator Ryman Healthcare rose 52c or 3.57 per cent to $15.10.

Other gainers were Rakon, up 8c or 6.2 per cent to $1.37; Tourism Holdings rising 10c or 4.02 per cent to $2.55; SkyCity Entertainment gaining 5c to $3.20; Pacific Edge picking up 5c or 3.38 per cent to $1.53; and Green Cross Health increasing 4c or 3.39 per cent to $1.22.

Vista Group was down 6c or 2.17 per cent to $2.71; South Port New Zealand fell 21c or 2.23 per cent to $9.20; and Goodman Property Trust declined 4c to $2.42.

Utilities software firm Gentrack surged 31c or 20.13 per cent to $1.85 after upgrading its 2021 revenue to $105m, up from $100.5m, and its operating earnings (ebitda) to $12m, up from $10m. Gentrack said the second half has been stronger than expected.

Hallenstein Glasson fell 7c to $6.95 after reporting a 20 per cent increase in net profit to $33.32m on revenue of $350.75m, up 21.9 per cent, for the year ending August 1. The clothing retailer is deferring its final dividend till Auckland, New South Wales and Victoria come out of lockdown and its stores reopen.

Hallenstein said group sales have declined 18.9 per cent in the first eight weeks of the present financial year because of the store closures and profitability will be adversely impacted. The group has established a United States website to sell direct to customers there.

NZ King Salmon Investments rose 5c or 3.57 per cent to $1.45 after reporting a mixed first half-year to the end of July but offering strong hope for the second half. NZ King had a loss of $5.59m on revenue of $88.09m, up 19.5 per cent, and sales volume of 3629 tonnes.

NZ King said its fish size had normalised, the new harvest will be more than 4000 tonnes, premium pricing will stay in place, and it will remain profitable through the second half.

Transtasman chemicals business DGL Group continued its expansion and rose 10c or 3.25 per cent to $3.18 after buying West Australian chemical manufacturer Profill Industries for $7.65m.

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