Story image

MARKET CLOSE: NZ shares rise as Fonterra Fund rebounds from low

27 Mar 15

New Zealand shares rose, paced by Fonterra Shareholders' Fund as the stock rebounded from a record low. Outside the benchmark index, Hallenstein Glassons advanced after reporting a 40 percent jump in first-half profit.

The NZX 50 Index rose 21.08 points, or 0.4 percent, to 5854.248. Within the benchmark index, 22 stocks rose, 19 fell and nine were unchanged. Turnover was $106 million.

Units of FSF, which give holders access to Fonterra Cooperative Group's dividend stream, rose 1.1 percent to $5.56, rebounding from yesterday's record low close. Earlier this week the world's largest dairy exporter posted a 16 percent drop in first-half profit to $183 million in the six months to Jan. 31, which it said reflected tough conditions in dairy, while also trimming its guidance for dividends to a range of between 20 cents and 30 cents, from a previous 25 cents to 35 cents.

"Fonterra is running around talking to the market today and maybe they're alleviating some of the concerns people might have," said Rickey Ward, head of New Zealand equities for JB Were. "In the last few days you've seen a lot of emotion and confirmation that it is a complex company but it is growing back to normalised levels in my mind. You saw emotion drive the price down."

Outside the NZX50, Hallenstein advanced 6.5 percent to $3.44. The fast-fashion retailer lifted first-half profit some 40 percent to $8.6 million, while raising its dividend to 14.5 cents per share, from 12 cents per share a year earlier as it clawed back market share and widened its margins in a competitive retail environment.

"The reality is it has been a company that's faced some structural headwinds and that has disappointed because of the challenges it is facing," Ward said. "This is an improvement and it's been steadily improving over the last few announcements. Today's move in the share price is possibly a reflection of a little bit of renewed confidence."

Spark New Zealand, formerly Telecom Corp, rose 0.3 percent to $2.98. The telecommunications provider is shifting to become a content, cloud and data company to boost profit growth as its traditional phone lines business shrinks. It is launching Lightbox, an online television streaming product, but has had to cut prices to compete with global service Netflix.

"There's increased competition with Netflix and you've had them having to reduce their pricing as well, so it is clearly becoming a very competitive structural issue rather than fundamentally based," JB Were's Ward said. "It is a company that has been a little bit over valued according to most but offering a pretty healthy dividend."

Vector, the Auckland lines company, was the worst perfomer on the benchmark index, declining 2.9 percent, or 9 cents, to $3.04 as it shed its rights to its 7.5 cents half-year dividend. Meridian Energy, the government controlled energy company, fell 1.4 percent, or 3 cents, to $2.05 as it gave up rights to its 6.2 cents per share interim dividend, which includes a special dividend payment. Precinct Properties New Zealand, the property investor and developer, dropped 0.8 percent, or 1 cent, to $1.18 as it shed rights to its 1.35 cents interim dividend.

Pacific Edge, the biotech firm, led the benchmark index higher, up 8.5 percent to 77 cents.

52mil users affected by Google+’s second data breach
Google+ APIs will be shut down within the next 90 days, and the consumer platform will be disabled in April 2019 instead of August 2019 as originally planned.
GirlBoss wins 2018 YES Emerging Alumni of the Year Award
The people have spoken – GirlBoss CEO and founder Alexia Hilbertidou has been crowned this year’s Young Enterprise Scheme (YES) Emerging Alumni of the Year.
SingleSource scores R&D grant to explore digital identity over blockchain
Callaghan Innovation has awarded a $318,000 R&D grant to Auckland-based firm SingleSource, a company that applies risk scoring to digital identity.
IDC: Standalone VR headset shipments grow 428.6% in 3Q18
The VR headset market returned to growth in 3Q18 after four consecutive quarters of decline and now makes up 97% of the combined market.
Spark Lab launches free cybersecurity tool for SMBs
Spark Lab has launched a new tool that it hopes will help New Zealand’s small businesses understand their cybersecurity risks.
Preparing for the future of work – growing big ideas from small spaces
We’ve all seen it: our offices are changing from the traditional four walls - to no walls. A need to reduce real estate costs is a key driver, as is enabling a more diverse and agile workforce.
Bluetooth-enabled traps could spell the end for NZ's pests
A Wellington conservation tech company has come up with a way of using Bluetooth to help capture pests like rats and stoats.
CERT NZ highlights rise of unauthorised access incidents
“In one case, the attacker gained access and tracked the business’s emails for at least six months. They gathered extensive knowledge of the business’s billing cycles."