MARKET CLOSE: NZ shares rise; SkyCity gains on Key's hint of convention funding
New Zealand shares rose, paced by Sky City Entertainment Group after Prime Minister John Key said he wouldn't rule out government funding to help it build its Auckland convention centre. Guinness Peat Group fell.
The NZX 50 Index rose 14.524 points, or 0.3 percent, to 5784.094. Within the index, 21 stocks rose, 23 fell and six were unchanged. Turnover was $127 million.
Sky City advanced 3.5 percent to $3.90 after Prime Minister John Key told reporters the casino operators convention centre was a "long-term asset" and wouldn't rule out government funding should it overrun its $402 million budget to prevent an "eyesore" being built. The company is also due to report first-half earnings tomorrow, which should show growth in its flagship Auckland casino.
"Investors are seeing that as a positive sign that there's some pretty close partnership between the governement and Sky City for that convention centre, and perhaps more confidence that is going to go through," James Smalley, director at Harbour Asset Management said. "The main thing investors will be looking for tomorrow is the performance of the flagship in Auckland and if that is showing continued guidance, as it said it was at the annual meeting, that could well explain buying today."
Guinness Peat Group declined 3.3 percent to 43.5 cents. The company owns threadmaker Coats after divesting all its assets but is yet to return funds to shareholders as it negotiates regulators in the UK surrounding its Coats pension scheme. Low interest rates across Europe have weighed on the stock, as it cost more for the company to maintain the pension fund payments.
"That scenario certainly hasn't improved over the last two or three years for the company, but that is an issue for all defined benefit plans," Smalley said. "For Guinness Peat which has those liabilities they're quite significant."
Argosy Property was unchanged at $1.13. The listed property investor spent $59 million buying five industrial sites in Wellington as part of a plan to reduce exposure to retail properties.
Spark New Zealand, formerly Telecom Corp, advanced 1.2 percent to $3.47. A2 Milk Co, the milk marketing company, led the benchmark index higher climbed 4 percent to 52 cents.
Outside the benchmark index, CDL Investments surged 8.3 percent to 65 cents, its highest level since 1987 after the residential property developer controlled by Millennium - Copthorne Hotels New Zealand posted a 9.7 percent increase in first-half profit to $14.7 million on a jump in sales of sections. Millennium - Copthorne rose 1.5 percent to $1.36 after the hotel chain posted an 11 percent increase in annual profit to $30.2 million for the year ended Dec. 31 after its revenue climbed 20 percent to $148.2 million.
Delegat Group was unchanged at $4.50 after New Zealand's largest listed wine company said first-half operating profit rose 1 percent to $20.5 million and it's on track to meet guidance for full-year case sales and earnings.
On the New Zealand Alternative Index, Enprise Group rose 4 percent to 52 cents. The software company may raise as much as $4.8 million in a share purchase plan to fund its expansion plans.
