New Zealand Oil & Gas shares rose 4 per cent yesterday to close at 65c.
New Zealand Oil & Gas shares rose 4 per cent yesterday to close at 65c.
NZX 50 edges higher as network operator’s stock price gains 1.1% after first-half earnings met market expectations
New Zealand shares rose yesterday, paced by Chorus as its first-half earnings met with market expectations. Xero rose to a four-month high as a seller exited the stock.
The NZX 50 Index rose 5.41 points, or 0.1 per cent, to 5754.36. Within the index, 24 stocks rose, 18 fell, eightwere unchanged. Turnover was $253 million, including $76 million of shares in Fletcher Building, which closed up 8c to $8.53.
Chorus rose 1.1 per cent to $2.86. The telecommunications network operator posted an 18 per cent drop in first-half profit to $64 million, meeting estimates, as it contends with regulated price cuts to sell access to its copper line network, while narrowing the forecast cost to build its nationwide fibre network.
"A little bit more relative clarity in terms of the installation side of the equation and savings targets are positive, and their ability to hit key targets is positive," said Shane Solly, director of Harbour Asset Management. "There is still some uncertainty there, and the Chorus team seem to be focusing on making sure they're doing their underlying rollout well."
Xero, the cloud-based accounting software firm, rose 1.8 per cent to $20.05, paring an intraday high of $20.40 and has gained some 24 per cent since last week.
The climb in the share price saw the stock market operator and regulator issue a 'please explain' notice to the company, asking Xero to confirm it was disclosing all material information which might be behind the gain. The tech firm confirmed it was, without issuing any further explanation to the gain in its shares.
Heartland New Zealand fell 2.2 per cent to $1.35. The bank, which was formed from the merger of Marac Finance with Southern Cross and Canterbury building societies, increased first-half profit by 41 per cent to $623.5 million, the mid-range of its earning guidance, as it focused on niche products. Its reverse mortgage business it bought added to earnings, but didn't grow as much as expected.
"A little bit disappointing, some of the growth parts of the business are yet to match expectations," Solly said. "The market has very high expectations at the moment, and when stocks don't meet those expectations they're generally coming off."
The market is about half way through financial reporting season, which has largely been mixed, Solly said.
"We're seeing slightly more earnings downgrades than upgrades and given where the market is priced, we need to see some more positive earnings stats for people to get excited," he said. "Companies are a little more cautious in their forward statements."
Freightways rose 0.5 per cent to $6.07. The courier and logistics business posted a 21 per cent gain in first-half profit to $26.3 million after lifting sales and fattening margins at its courier and information management units, allowing the company to declare a record interim dividend.
Sky Network Television fell 0.9 per cent to $5.69. The pay-TV operator lifted first-half profit 13 per cent to $92.5 million as it cut costs to stem the net loss of 8707 subscribers.
New Zealand Oil & Gas led the benchmark index higher, up 4 per cent to 65c. Spark New Zealand fell 1 per cent to $3.13.
