NZ shares rise to record as A2, Westpac, Meridian, Sky advance

A2 Milk was this year's best performer on the benchmark index.

New Zealand shares rose to a new record as A2 Milk Co continued its strong rally, with Westpac Banking Corp, Meridian Energy and Sky Network Television all advancing on light trading.

The S&P/NZX 50 Index capped off two trading weeks of consecutive gains, up 30.2 points, or 0.5 percent, to 6225.54. Within the index, 32 stocks rose, eight fell and 10 were unchanged. Turnover was $58.4 million, in shortened trading hours.

A2 Milk, this year's best performer on the benchmark index, rose 9.4 percent to $1.97. The stock touched an intraday high of $2.02 at 12:19pm, but dropped back by the 1pm close. The dual-listed milk producer has risen 79 percent since it announced a second earnings upgrade for the year last Friday.

"From everything we hear, it really is international funds chasing growth companies right around the globe, and this company has ticked that box so they just keep buying it," said Rickey Ward, NZ equity manager at JBWere.

"Clearly it's growing, and clearly it's growing better than the market expected. It sort of feels like a tech company - it's just momentum rather than anything fundamentally based. If you're a fundamental analyst or valuer of the company, you'd probably start to question why. They're all positive things, but to get a price anywhere near those sorts of levels you have to make some quite aggressive assumptions of how successful the company's going to be. They may well come true, but you are paying for a lot of this now," Ward said..

Westpac rose 1.5 percent to $34.56, along with Australia & New Zealand Banking Group which increased 1.3 percent to $28.94.. Meridian Energy gained 1.3 percent to $2.37, and Metro Performance Glass rose 1.2 percent to $1.69.

Sky Network Television increased 1.1 percent to a three-week high of $4.53. The stock has recovered some momentum after dropping as low as $4.19 on Dec.15, Ward said.

"Sky TV continues to re-rate, that's one that people haven't talked about. It's regained more than its losses now, there's been a little bit of movement on lightish volumes, but not no volumes," he said.

Kathmandu was the worst performer today, falling 1.3 percent to $1.56. The stock has dropped 26 percent this year, from a starting price of $2.11.

"Investors are more worried about its first-half earnings," Ward said. "There's a whole lot of high expectations built into this company subsequent to Briscoes making a bid for it, there's a lot of publicly made statements from the chairman that everyone will be questioning whether they're able to be delivered, which is why you've seen the share price drift back."

Vital Healthcare Property Trust fell 0.3 percent to $1.87. The property investor, which owns and develops property for hospitals and healthcare, has bought Boulcott Hospital's real estate in Lower Hutt for $30.7 million, and a further $1 million on residential land next door for future development. It also signed a 22-year lease with Australia's Pulse Health Group which bought the operating business earlier this month.

(BusinessDesk)