MARKET CLOSE: Shares rise as Hallenstein trading boosts retailers; Spark gains

New Zealand shares rose after a strong Christmas trading update by clothing chain Hallenstein Glasson lifted demand for other retailers, including Kathmandu Holdings. Spark New Zealand paced gains as investors continued to seek high-dividend paying stocks.

The NZX 50 Index rose 21.411 points, or 0.4 percent, to 5638.137. Within the index, 24 stocks rose, 19 fell, and seven were unchanged. Turnover was a lighter than usual $59 million, due to Wellington Anniversary Day.

Outside the benchmark index, Hallenstein climbed 7.9 percent to $3.41, after the retail chain said it expects first-half earnings to rise by about a third to between $8.1 million and $8.3 million, after robust Christmas trading with positive growth continuing through January.

Kathmandu, the outdoor good retailer, led the NZX50 higher up 2.7 percent to $19.3 on the positive retail sentiment. Pumpkin Patch, the unprofitable childrenswear chain, rose 2.2 percent to 23.5 cents.

"Hallensteins have bucked the trend a little bit, most retailers have struggled, but Hallensteins have come off a pretty tough couple of years," said Grant Williamson, a director at Hamilton Hindin Greene. "It certainly hasn't hurt other retailers. It flowed over a touch to them."

Warehouse Group, New Zealand's largest listed retailer, fell 2.6 percent to $2.59. Earlier this year it flagged weak Christmas sales, blaming unseasonal weather forcing it to discount to move product.

"Warehouse is still being re-rated downwards after their disappointing guidance," Williamson said.

Stocks with relatively high dividend streams continued to attract investors ahead of the European Central Bank policy meeting on Thursday, which is expected to see the introduction of a quantitative easing programme. That would continue to keep global interest rates low, increasing the lure of stocks offering steady incomes.

Spark, formerly Telecom Corp and held for its reliable income, rose 2.6 percent to a seven-year high of $1.93.

"Spark has come in for very good demand," Williamson said. "Investors seem to be considering it as a very defensive play with a good dividend yield. Investors have to put their money somewhere and equities is still favoured well over interest-bearing investments."

Among other stocks with steady dividend streams, MightyRiverPower gained 1.6 percent to $3.28, Meridian Energy advanced 0.8 percent to $1.90, Property for Industry gained 0.6 percent to $1.565 and Sky Network Television rose 0.5 percent to $5.93.

NZX was unchanged at $1.15. Former Cabinet Minister Simon Power will resign from the stock market operator's board to avoid any conflict of interest as it completes its acquisition of SuperLife to expand its funds management business.

Pacific Edge, the Dunedin-based biotech firm, was the worst performer on the day dopping 4.9 percent to 77 cents.

Outside the benchmark index, Pyne Gould Corp rose 5.1 percent to 41 cents. The asset management firm controlled by managing director George Kerr has been fined and censured over the delayed release of its annual report, which was tagged by auditor PwC over the firm's inability to obtain sufficient information about Pyne Gould's investment in Torchlight Group and Torchlight Fund.

(BusinessDesk)