MARKET CLOSE: Kathmandu leads the NZX 50 higher on positive US sentiment

New Zealand shares rallied yesterday with global markets after positive leads from the US, with the local market led by Kathmandu Holdings and Australia & New Zealand Banking Group.

The S&P/NZX50 Index rose 39.88 points, or 0.6%, to 7348.3. Within the index, 32 stocks rose, 11 fell and eight were unchanged. Turnover was $121.7 million.

Kathmandu led the index, up 4.3% to $1.93. Last week, the retailer said its annual profit rose as much as 67% on fatter margins. Net profit was between $33 million and $34 million in the 12 months ended July 31, up from $20.4 million a year earlier and within Kathmandu's upgraded June guidance of between $32 million and $35 million. The stock has gained 11% since the June announcement.

"They've come closer to the end of the financial year so there's a bit more confidence around what they've seen within their business, and they've changed the way they approach sales programmes, particularly in these key sales periods they have," said Craig Stent, director at Harbour Asset Management. "Their sales numbers are up a little bit, but it's really around their protection of margins – they're not cutting prices too much to get sales through, and they've got stock under control as well, which is another pleasing highlight."

The dual-listed banks advanced as the S&P/ASX 200 outpaced the local index, up 0.8% at 5pm New Zealand time. ANZ gained 2.6% to $27.49 and Westpac Banking Corp rose 1.8% to $32.60.

"The general market's positive with what happened on Wall Street on Friday their time – job numbers came out and looked pretty strong, probably surprising everyone, the US markets are up about 1% so there's follow on from that in our region," Stent said.

Fletcher Building gained 2.2% to $9.81, Heartland Bank rose 2.2% to $1.40 and NZX advanced 2% to $1.04.

Mercury New Zealand, formerly known as Mighty River Power, was the worst performer, down 2% to $3.02.

Steel & Tube Holdings fell 1.9% to $2.07 and Vector dropped 1.7% to $3.42.

Outside the main index, Augusta Capital rose 1.9% to $1.10. The property investor and funds management firm reaped $2.9 million in fees from its biggest property syndication deal on the purchase of the NZME Central complex in downtown Auckland.

Michael Hill International dropped 1.3% to $1.49. Chief executive Mike Parsell will step down after 16 years leading the jewellery company. The shares, which now have their primary listing on the ASX, have soared 53% this year.

IkeGPS, the laser measurement tool maker that expects to be cash break-even in the fourth quarter of 2017, is in a trading halt pending a placement of shares to institutional investors in Australia and New Zealand. The shares last traded at 69c  before being halted, valuing the company at $34.8 million. The stock has declined 1.4% this year.

ASX-listed juice maker Food Revolution Group gained 12.5% to 18Ac . The company has sold its New Zealand operations and is leasing its LangTech citrus assets to Singapore-based Gravity Solutions Global in a deal it values at more than $A17 million.

(BusinessDesk)

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