NZ shares rise on bullish earnings

New Zealand's main shares index ended the week on an upbeat note as investors were encouraged by bullish earnings results. Skellerup Holdings led the market after it repeated last year's record result.

Friday, August 21st 2020, 6:01PM

by BusinessDesk

The S&P/NZX 50 Index rose 173.78 points, or 1.5 percent, to 11,835.94. Within the index, 42 stocks rose, four fell and four were unchanged. Turnover was $193.3 million.

A week of earnings results that came out better than investors had expected, combined with the likelihood of the level-3 lockdown ending in Auckland next week, stirred up a buoyant mood among investors. The index is up more than 3 percent this week.

“There is a little bit of optimism from offshore with the Nasdaq hitting a record high last night and locally a bit of optimism about potentially moving down an alert level next Wednesday,” said Greg Smith, head of research at Fat Prophets.

Skellerup Holdings shares rose 6.4 percent to an all-time high of $2.65 as sales growth in the United States dairy industry helped the rubber goods maker match last year's record profit despite the pandemic knocking its industrial unit.

Smith said “better-than-feared” earnings results was the main theme this season, demonstrated by Skellerup’s result landing slightly ahead of analysts’ expectations.

Kiwi Property Group rose 5 percent to $1.05, recovering to Tuesday’s closing price before the second lockdown was announced last Tuesday. The retail property investor was heavily affected by the lockdown with most stores closed, Smith said.

A2 Milk rose 1.6 percent to $20.24, halting a two-day decline, after announcing it was looking to buy 75.1 percent of Mataura Valley Milk for approximately $270 million to add in-house manufacturing capability.

A2’s current dairy provider, Synlait, fell 1.6 percent to $6.58. Smith said the announcement was “a wake-up call” but wouldn’t end the relationship between the two firms.

“A2 is going from strength-to-strength and Synlait will want to ride those coat tails,” he said.

Fisher & Paykel Healthcare snapped a three-day decline, gaining 1.6 percent to $35.30. The healthcare manufacturer announced today it is planning to open its third manufacturing facility in Mexico within the next two years.

Earlier this week, the company gave its sixth earnings upgrade this year causing its share price to spike to $37.30.

Vista Group International rose 2.4 percent to $1.29. Yesterday, Harbour Asset Management sold 3 million shares, or a 1 percent stake, on market at an average price of $1.30 per share. It now holds a 5 percent stake in the company.

Sanford posted the day’s biggest loss, falling 2.7 percent to $5.80.

Outside of the top-50 index, Metro Performance Glass shares jumped 14.3 percent to 24 cents after the company said its Australian business was profitable in the four months through July.

In currency, the kiwi dollar treaded water and was trading at 65.40 US cents at 5pm in Wellington, down from 65.62 cents yesterday.

The trade-weighted index was at 70.67 at 5pm, down from 71.04 yesterday. The kiwi traded at 90.81 Australian cents from 91.35 cents, 69.08 yen from 69.57 yen, 55.06 euro cents from 55.38 cents, 49.38 British pence from 50.09 pence, and 4.5171 Chinese yuan from 4.5421 yuan.

Tags: Market Close