MARKET CLOSE: Stocks rise led by Xero, ANZ; Summerset drops on first half earnings

New Zealand stocks rose, while lagging behind a global rally, as investors waited on reporting season to justify market gains. Xero led the benchmark index higher, while Summerset Group fell after reporting first-half profit. 

The NZX 50 Index rose 6.175 points, or 0.1 percent, edging up from a four-month low to 5055.808. Within the index, 26 stocks rose, 17 fell and seven were unchanged. Turnover was $101 million. 

Stocks across the Asia-Pacific followed Wall Street higher, on easing tensions in Ukraine ahead of a proposed Red Cross mission and optimism US bombing will help push back militants in Iraq. Australia’s S&P/ASX200 Index climbed 1.2 percent in afternoon trading, Japan’s Nikkei 225 edged up 0.1 percent as did South Korea’s Kospi 200 Index. 

“We’re up only ever so slightly, certainly not to the degree any of the offshore markets were overnight, or Australia, we’re underperforming most of those other markets around the world,” Mark Lister, head of research at Craigs Investment Partners said. “The main reason for that is reporting season is kicking off in earnest this week so people are reluctant to take any large positions ahead of that, they’re waiting to see how things pan out.

ASX dual-listed stocks rose on Australian gains. Xero, the cloud-based accounting software firm, advanced 2.3 percent to $23.30. Australia and New Zealand Banking Group climbed 2.1 percent to $36.40. Westpac Banking Group increased 1.4 percent to $36.80. 

Summerset was the worst performer on the day, falling 2.7 percent to $2.90. New Zealand's third-largest retirement village operator increased first-half profit  42 percent to $15.3 million in the six months ended June 30, lagging last year's first-half profit growth of 174 percent, and below Forsyth Barr’s forecast $17.5 million. 

NZX paced the decline, down 2.3 percent to $1.25. The stock market operator was the first benchmark index constituent to kick off earnings season yesterday, reporting first-half profit rose 8.6 percent to $6.97 million from the same period a year earlier, below Forsyth Barr's estimate of $7.1 million. 

“NZX yesterday was a little bit underwhelming, and another was Summerset today again a bit underwhelming below market expectations,” Lister said. “When your market has had quite a good run for the last couple of years and valuations are looking reasonably high any disappointment will mean that investors vote with their feet.”

SkyCity Entertainment Group fell 1.4 percent to $3.55. The casino operator is due to report tomorrow and Forsyth Barr forecasts annual earnings will fall 12 percent to $124.1 million in the year ended June 31.

Infratil fell 0.6 percent to $2.415. The infrastructure investor told shareholders it’s expecting to spend between $295 million and $365 million next year on capital projects across its infrastructure portfolio, about half last year’s $613.6 million as Australian wind farm investments by TrustPower are completed.

Fletcher Building, New Zealand’s largest listed company, advanced 1 percent to $8.90. Spark New Zealand, the telecommunications provider formerly known as Telecom Corp, fell 1.3 percent to $2.775. 

Outside the benchmark index, PGG Wrightson was the best performer across all New Zealand stocks, rising 8.9 percent to a five-month high of 43 cents. The rural services firm controlled by China’s Agria Corp posted an annual profit of $42.3 million after a year-earlier loss of $306.5 million driven by a historical impairment, and held off making a forecast for 2015 because of volatile dairy prices. Sales rose to $1.2 billion from $1.13 billion.

Kirkcaldie & Stain was unchanged at $2.20. The Wellington-based department store said it has reached an agreed purchase price for its two buildings for $45.85 million with an undisclosed Wellington investor below its most recent independent valuation dated Aug. 31 of $50m and a carrying amount, as reported in its interim financial statements for the period ended Feb.  28, of $49.87 million. 

(BusinessDesk)