NZ shares rise despite Z Energy plunge

Z Energy, the country's biggest fuel retailer, dropped 9.3 per cent to a three-and-half year low of $5.53. Photo / File

New Zealand shares rose for a fourth day in five as improving sentiment in global markets encouraged investors back into some favoured sectors.

The S&P/NZX index advanced 91.52 points, or 1.1 per cent, to 8,843.83. Within the index, 31 stocks gained, 12 fell and seven were unchanged. Turnover was $134.2 million.

David Price, director of institutional equities at Forsyth Barr, said the latest round of annual meetings and September earnings are providing investors some direction.

But he said that, despite 16 down sessions out of 21 trading days in October, price-earnings ratios are "still pretty high" given growth rates are "relatively anaemic."

The biggest news on the market today was Z Energy. The country's biggest fuel retailer dropped 9.3 per cent to a three-and-half year low of $5.53 after reporting a 21 per cent drop in first-half earnings and announcing a dividend about five cents less than investors were expecting.

Price said investors had not been expecting a strong result since the firm's first-quarter update but "had lost sight of the dividend."

The company will also have to have a "pretty solid second half" to meet the revised full-year guidance it offered today, Price said.

Among the major gainers. A2 Milk Co rose 2.7 per cent to $10.70. Synlait Milk rose for a third day from a seven-month low, gaining 0.9 per cent to $8.75 today. Ryman Healthcare rose 6.2 per cent to $12.85.

Fletcher Building fell 1.3 per cent to $5.96 after reporting a non-cash loss of up to $20m on the US$39m ($59.2m) sale of the firm's steel roof tile business to Canada's IKO group.

Price said the sales price achieved was better than many would have expected.

Homeware and sporting goods retailer Briscoe Group rose 0.3 per cent to $3.35. The firm's third-quarter sales rose 2.6 per cent to $129.4m, or 1.4 per cent on a same-store basis. Gross profit margins also improved despite subdued consumer confidence and higher pump prices.

Kathmandu Holdings rose 7.1 per cent to $2.87. The outdoor equipment retailer has had a "reprieve" in recent days after steady selling by a large holder, Price said.

Air New Zealand rose 5.7 per cent to $2.96. The company reported 6 per cent September passenger growth yesterday.

Tourism Holdings fell 1.6 per cent to $4.92. Investors at the company's annual meeting yesterday were wary of the firm's plans to sell out of many of its local tourism activities and invest $15m in its TH2Connect joint venture with US RV maker Thor.

Precinct Properties New Zealand fell 0.4 per cent to $1.405. The 2.5 million shares traded today was about three times the 90-day daily average. The company is going ahead with the second stage of its Wynyard Quarter development on an uncommitted basis.

Auckland International Airport rose 1 per cent to $7.06. The Commerce Commission today said the $1.8 billion the firm plans to spend on infrastructure during the next five years may over-recover $37m. The regulator stopped short of calling the proposed 7.06 per cent return excessive.

Among other companies with volumes of more than one million, Meridian Energy rose 0.5 per cent to $3.15, Spark New Zealand rose 0.9 per cent to $3.985, Goodman Property Trust was unchanged at $1.50, as was Kiwi Property Trust at $1.315.