MARKET CLOSE: NZX 50 rises to record, led by Sky TV on rugby   24 Oct 2014

Article - BusinessDesk

MARKET CLOSE: NZX 50 rises to record, led by Sky TV on rugby rights; Spark, Ebos gain

By Suze Metherell

Oct. 24 (BusinessDesk) - New Zealand shares advanced to a record for a third day, led by Sky Network Television after the pay-TV operator raised its profit forecast and extended its contract for rugby rights. Spark New Zealand, Ebos Group and Vector gained as an offshore rally flowed through to the local market.

The NZX 50 Index rose 41.001 points, or 0.8 percent, to 5333.826. Within the index, 37 shares rose, eight fell and five were unchanged. Turnover was $144 million.

Sky TV climbed 3.4 percent to $6.13, after the country's dominant pay television provider said it had renewed its five year contract for the broadcasting rights for rugby and said it expected annual profit to grow as much as 8.6 percent to $180 million in 2015. It also detailed a new $20 a month subscription video ondemand service, Neon, which will launch in December and target non-Sky customers as it faces intensifying competition for viewers.

"The returning of the rugby rights is a positive thing for them - for some Sky viewers that's a key detail," said Shane Solly, director at Harbour Asset Management. "Sky's been very effective in coping with technology changes and they seem to be doing that again."

Overnight, Wall Street rallied on solid corporate earnings and a shift in sentiment that growth in the world's largest economy wasn't slowing. New Zealand's benchmark index followed Asia markets higher, with Japan's Nikkei 225 Index gaining 0.9 percent in afternoon trading while Australia's S&P/ASX 200 increased 0.7 percent.

"We're following a relatively strong rally overnight in the offshore markets," Solly said. "We've come a long way, markets have recovered from where they were a week ago."

Ebos, the animal health care and pharmaceutical company, rose 3.1 percent to $9.20. Vector, the Auckland lines company, advanced 1.9 percent to $2.71. Spark, formerly Telecom Corp, gained 2.3 percent to $3.11. Chorus, the telecommunications network operator, increased 2 percent to $2.06.

Fletcher Building, New Zealand's largest listed company, rose 0.2 percent to $8.53.

NZX was unchanged at $1.15. The stock market operator said it doesn't know why its share price has declined, in response to a query from its own disciplinary arm, the New Zealand Markets Disciplinary Tribunal special division, which was alerted on Oct. 17 when shares of NZX fell 8.7 percent over 20 days to $1.16 from $1.27

Heartland New Zealand rose 1 percent to $1. The bank which formed after the merger of Canterbury and Southern Cross building societies and Marac Finance has lost its chief risk officer Mark Mountcastle, who resigned effective from the end of November.

DNZ Property Fund gained 0.6 percent to $1.745. The property investor said it boosted its portfolio value by $10.7 million to $788 million in the first half and has leased more than three quarters of its new Auckland mall, due to open this time next year.

Outside the benchmark index, Cavalier Corp dropped 10 percent to 90 cents after the carpet maker warned it will probably miss earnings guidance due to a strong kiwi dollar against its Australian counterpart and a high price of wool. The Auckland-based company said normalised annual profit in the 2015 financial year will probably fall short of its forecast for a "modest increase" to the $5.8 million result it posted in 2014. First-quarter trading volumes were consistent with the same period a year earlier, though margins were under pressure, it said.

Sealegs Corp, which makes amphibious boats, rose 8.3 percent to 13 cents after it said it turned a first-half profit after strong local demand underpinned a pick-up in sales, and as it taps new markets in South America. The Auckland-based company reported a net profit of $32,300 in the six months ended Sept. 30, turning around a loss of $604,000 a year earlier.

Dorchester Pacific was unchanged at 26 cents and has gained some 18 percent since the start of the year. The finance company, which is midway through a takeover for car auction house Turners Group, closed its $30 million capital raising saying the offer was oversubscribed. Turners was unchanged at $3.03 and has gained 30 percent since the beginning of the year.

(BusinessDesk)

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