New Zealand shares rose after Fonterra Cooperative Group posted a jump in first-half earnings on record production, boding well for the broader economy. Rural services company PGG Wrightson and transport group Mainfreight were among gainers.
BUSINESSDESK: New Zealand shares rose after Fonterra Cooperative Group posted a jump in first-half earnings on record production, boding well for the broader economy. Rural services company PGG Wrightson and transport group Mainfreight were among gainers.
The NZX 50 Index rose 8.93 points, or 0.3 percent, to 3495.44. Within the index, 25 stocks rose, 11 fell and 14 were unchanged. Turnover was $96 million.
Fonterra today reported an 18 percent gain in first-half profit, driven by returns from its ingredients business, the biggest part of the company. It also unveiled plans to target emerging markets and Asia more aggressively as they take over from mature markets of the US and Europe in driving demand.
"It is important for the rest of the economy and the market," said Shane Solly, portfolio manager at Mint Asset Management.
Wrightson, the nation’s biggest rural services company, rose 2.7 percent to $5.60. Mainfreight, which works with KiwiRail and major ports to get dairy products out of New Zealand, rose 1.1 percent to $9.55.
Sentiment was also buoyed by the National Bank Business Outlook, which showed firms are more upbeat about the economy and their own place in it.
"That the positive recovery in New Zealand continues as a whole is important for what is happening in the stock market',” Solly said. “The New Zealand market bucked the trend globally today."
Chorus, the network company spun off from Telecom in November, rose 1.4 percent to $3.69, on the prospect of it offering a steady, low risk dividend stream.
"It has an attractive high yield – with potentially low risk attached," Solly said. “People are aware it’s not without its issues and the company has been careful about what it has said."
Ryman Health, a retirement village operator, rose 2.3 percent to a record $3.07.
Solly said the company has "consistently shown it can manage through the good time and the bad. “It’s a good steady earner."
Hallenstein Glasson, which posted better earnings growth this with a slightly dimmer next six month, fell 1.5 percent to $3.96.
