ACC has bought a 5% stake in Vista Group at a cost of $11.84m. Photo / RNZ, Angus Dreaver
The New Zealand sharemarket surged to its highest close this year after having its sixth gain in seven trading days on increased confidence offshore.
With Wall Street having a strong rebound, the S&P/NZX 50 Index kicked on and closed at 13,223.53, up 90.32 points or 0.69%.
There were 97 gainers and 43 decliners on volumes of 32.4 million share transactions worth $124.4m following the placement of $140m worth of Vista Group shares.
ACC bought 3.85m shares at a cost of $11.84m for a 5% stake in Vista, which was up 11c or 3.63% to $3.14.
The NZX index surpassed the previous highest close for the year of 13,194.07 points on August 21, and rose 2.2% for the week. It is now nearly 1% ahead year to date, and has in fact risen more than 12% since the low point of 11,775.88 points on April 7.
‘Bad news means good news’
Shane Solly, portfolio manager with Harbour Asset Management, said it had been a rollercoaster ride since the low in early April, and that was indicative of how the New Zealand economy had ridden.
“The company results season gave a glimmer of light, and it’s great to see the index back in positive territory.”
Solly said a weaker-than-expected employment report triggered a rally in the United States.
“Purchasing managers’ indices were also weaker, and the bad news means good news for investors as this opens the door for an interest rate cut by the Federal Reserve, which will provide a stimulus for the rest of the world.”
The ADP private payrolls report showed an increase of 54,000 in August, with economists expecting private employers to add 75,000 jobs. The figure was also less than the revised 106,000 in July.
The S&P 500 hit a fresh record after gaining 0.83% to 6502.08 points.The Dow Jones Industrial Average was up 0.77% to 45,621.29, and the Nasdaq Composite increased 0.98% to 21,707.69.
Local stocks
At home, the market was led by Fisher and Paykel Healthcare up 76c or 2.05% to $37.89; Gentrack increasing 40c or 4.18% to $9.98; and Mercury Energy gaining 13c or 1.97% to $6.72.
Hallenstein Glasson rebounded 28c or 3.17% to $9.10; Freightways was up 20c to $12.39; Delegat Group gained a further 9c or 2% to $4.60; and AFT Pharmaceuticals rose 10c or 3.85% to $2.70.
KMD Brands gained 2.5c or 10% to 27.5c after outlining its reorganisation and product development plans. Eroad increased 10c or 4% to $2.60, and Vulcan Steel was up 17c or 2.2% to $7.90.
Fletcher Building declined 10c or 3.01% to $3.22 after providing a remuneration report disclosing managing director and group chief executive Andrew Reding’s salary at $1.456m and short and long-term incentives taking the total package to $5.08m.
Solly says Fletcher has had a good rally since its result, and it’s on the right path, increasing the relationship between shareholder returns and management remuneration.
Fletcher said with the appointment of Reding from the end of September last year, the board took the opportunity of resetting the remuneration package to have a stronger emphasis on the long term and be more tightly tied to share price performance.
Fletcher said the salary was reduced by $866,000, and the total remuneration decreased by $2m in line with business performance and compared to the previous group CEO’s arrangements.
Reding’s short-term incentives are $725,000 in cash and $725,000 in shares, and long-term incentives are worth $2.175m.
“Importantly, 56% of the total remuneration is now delivered in equity that vests over time, reinforcing long-term alignment with shareholder interests,” Fletcher said.
Summerset declined 21c or 1.93% to $10.66; Scales Corp was down 7c to $5.23; and Ventia Services decreased 16c or 2.64% to $5.89.
SkyCity, likely to be removed from the S&P/ASX 200 Index, was down 1.5c or 2.11% to 69.5c a day after its 1 for 3.35 retail offer, at 70c a share, closed.
SkyCity was seeking to raise $159m, and CEO Jason Wallbridge disclosed that he bought 200,000 shares, costing $140,000.
New Talisman Gold Mines fell 0.006c or 13.04% to 4c after indicating it will be seeking further working capital in a share placement.
In a trading update, New Talisman said the process of starting mining in the Karangahake Gorge has been highly complex and has taken longer than expected.
“We now have all the components in place to produce a saleable product.”