MARKET CLOSE: NZ shares mixed; Comvita up, Genesis gains on gentailer yield, Tegel hurt by chicken glut

New Zealand shares were mixed, with about the same number of gainers and decliners in the NZX 50 Index. Comvita rose on optimism about its prospects in China, Genesis Energy rose on perceptions that gentailers offer an attractive yield while Tegel Group fell amid concerns ample supplies of chicken are weighing on prices.

The S&P/NZX 50 Index rose 11.28 points, or 0.2 percent, to 7,073.83. Within the index, 22 stocks rose, 20 fell and eight were unchanged. Turnover was $172 million.

Comvita, the honey products company, rose 2.3 percent to $8.40. It reached $8.41 in intraday trading, the highest level this year. Chinese authorities have reportedly eased their stance on e-commerce trade, where there has been a thriving grey market in the company's products.

Genesis rose 1.9 percent to $2.13, Meridian Energy gained 0.4 percent to $2.82 and Mercury NZ rose 0.2 percent to $3.155.

"Gentailers are yielding above 8 percent. There's not a lot of earnings growth but not too many shocks either," said David Price, a broker at Forsyth Barr. "That's better than the yield (investors are getting) at the bank."

Price said the local bourse has "decoupled" from shares in the US, where benchmark indexes have been charting record highs. The latest earnings season "wasn't enough to drive the market forward" and profit growth hasn't matched share price increases, he said. In the wake of the results season, Forsyth Barr is projecting a 3 percent decline in earnings for the companies it follows (on an ebitda basis).

The NZX 50 reached a record high 7585.29 on Sept. 8 and has declined almost 7 percent since then. Part of the decline has been driven by "a massive pullback" in property stocks as rising interest rates dented the appeal of their dividend yield, Price said.

Goodman Property Trust fell 1.6 percent to $1.29 today. Argosy Property dropped 0.5 percent to 99.5 cents and Vital Healthcare Property fell 0.2 percent to $2.05.

New Zealand Refining rose 1.7 percent to $2.40. Australia & New Zealand Banking Group rose 1.5 percent to $34 and Westpac Banking Corp gained 1.4 percent to $36.94.

Z Energy rose 1.2 percent to $7.05 and Auckland International Airport gained 1.1 percent to $6.895.

Spark rose 0.2 percent to $3.39 while TeamTalk rose 3.6 percent to 86 cents.

TeamTalk said today it plans to sell a 70 percent stake in its problematic Farmside rural internet services provider to Vodafone New Zealand for $10 million, almost half what Spark New Zealand was willing to pay for the entire group. 

Tegel fell 2.5 percent to $1.15. "The news that is circulating is of further pricing pressure for chicken", Price said.

Intueri Education Group dropped 21 percent to 1.1 cents after the ailing private training provider said it will exit the Australian market on March 29, having failed to convince education authorities to re-register its colleges across the Tasman or renew funding. It also confirmed a standstill arrangement with its bank and said it couldn't get its accounts audited.

CBL Corp rose 0.9 percent to $3.35. The company said today it wants to add US insurer Affirmative Direct Insurance Co in a US$5.7 million deal which would expand its global footprint to the world's biggest economy. The Auckland-based credit surety and financial risk insurer filed a regulatory application to buy the US business, giving it a US insurance vehicle and licences to expand in the US, it said in a statement. 

(BusinessDesk)