MARKLET CLOSE NZ shares rise, Fletcher at 7-month high, Trade Me gains

New Zealand shares rose, as Fletcher Building gained to a 7-month high on signs of life in the Australian economy and amid perceptions the local market offers reasonably attractive dividend yields in a world of low interest rates.

The NZX 50 Index rose 3.595 points, or 0.1 percent, to 4610.306, the highest close in four months. Within the index, 18 stocks rose, 21 fell and 11 were unchanged. Turnover was a higher-than-average $198 million, including $72 million of Fletcher and $22 million of Sky Network Television.

Fletcher, which counts Australia as its second largest market, rose 1.8 percent to $9.42. The stock is up 42 percent in the past 12 months and has advanced the past few days in the face of improving Australian housing data.

“It’s a cyclical story,” said Nigel Scott, an adviser at Craigs Investment Partners. “People are a bit more encouraged by some of those stats.” Chief executive Mark Adamson is also “putting his market on the company,” he said.

Government figures today showed the Australian economy grew 0.6 percent in the second quarter, beating estimates for a 0.5 percent increase. Yesterday, Australia’s central bank kept its cash rate at a record low 2.5 percent, the same as the RBNZ’s key rate, meaning investors cross the Tasman are also eyeing better returns from stocks than they can get from fixed income investments.

Ebos Group, which doubled in size after buying Australian pharmaceutical wholesaler and distributor Symbion for $1.1 billion this year, rose 1.3 percent to $9.83.

A2 Corp fell 1.3 percent to 74 cents after the milk marketer said managing director Geoffrey Babidge and director David Mair had sold a combined 6 million shares, or 0.9 percent of the company.

Trade Me, the auction website, gained 2.1 percent to $4.43. The stock is rated a ‘hold’ based on a Reuters poll with a median price target of $4.80.

Companies shedding rights to their dividends led decliners today, with dual-listed wealth manager AMP falling 4.7 percent to $5.32, pay-TV operator Sky Network Television down 3.4 percent to $5.70 and lines company Vector dropping 2.5 percent to $2.71.

Precinct Properties dropped 4.3 percent to $1 after coming off a trading halt where it raised $50 million in a placement to institutional investors at a discounted price.

Telecom Corp fell 0.9 percent to $2.22 after the government announced the details of the radio spectrum auction, which mobile phone operators are expected to use for fourth-generation service. The government wants to raise at least $198 million from the auction.

Units in the Fonterra Shareholders’ Fund, which gives outside investors exposure to Fonterra Cooperative Group’s earnings stream, fell 0.7 percent to $7 after the dairy company found managers didn’t escalate the food contamination scare to chief executive Theo Spierings fast enough.

(BusinessDesk)