NZ shares edge up; Air NZ rises

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New Zealand shares rose, although the market was mixed, with Air New Zealand gaining after strong operating metrics and A2 Milk Co falling from a record high.

The S&P/NZX 50 Index gained 2.51 points, or 0.04 per cent, to 7,065.22. Within the index, 23 stocks rose, 19 fell and eight were unchanged. Turnover was $168 million,
Air New Zealand led the index, up 3.1 per cent to $2.365. In its monthly operating statistics for February, the national carrier reported a 2 per cent rise in revenue passenger kilometres compared to February 2016, with capacity up 5.3 per cent. Short-haul passenger numbers increased 2.2 per cent, while long haul numbers rose 3.1 per cent.

"They really do have a cash cow when it comes to the New Zealand domestic market," said James Smalley, director at Hamilton Hindin Greene. "At around $2.30 the market does seem to give it a bit of support. If the dollar falls it's good for inbound tourism, but in reality, they want a dollar around these levels because their margin is ultimately a reflection of where the dollar is."

Summerset Group gained 2 per cent to $5.08, Chorus rose 1.9 per cent to $4.23 and Westpac Banking Corp advanced 1.6 per cent to $37.38.

A2 Milk was the worst performer, down 3.4 per cent to $2.85, though that comes after a strong run in the month so far which culminated in it reaching a record $2.85 yesterday.

Spark New Zealand dipped 0.4 per cent to $3.39, while TeamTalk gained 12 per cent to $1.04. The telecommunications minnow has been in a war of words with Spark after independent adviser Grant Samuel & Associates found the underlying value of TeamTalk is between $1.52 to $2.11 per share - well above Spark's 80 cent offer for the company.

On Friday, TeamTalk announced it had agreed to sell a 70 per cent stake in its Farmside rural internet services provider to Vodafone New Zealand for $10m, almost half what Spark is willing to pay for the entire group. Shareholders will vote on the plan next month at a special meeting.

"It will be interesting to see whether Spark is going to sweeten the deal or, if they really do think it's ridiculous, to walk away," Smalley said. "Either the market's got it horrendously wrong or the independent advisors are making assumptions that don't necessarily apply in the specific circumstances. It's a very unusual set of circumstances, and for long-suffering TeamTalk investors it's definitely a bit of good news they haven't had over the years."

Mercury New Zealand dropped 1.9 per cent to $3.10, while Metro Performance Glass fell 1.4 per cent to $1.40.