New Zealand shares edged up to a new record as stocks across Asia rose in a relatively quiet earnings day domestically, with Fletcher Building extending its gain after yesterday's result while Skellerup climbed on its increased profit.
The S&P/NZX 50 index rose 16.72 points, or 0.2 per cent, to 7,870.06, a new record close. Within the index, 30 stocks gained, 14 fell, and six were unchanged. Turnover was $152 million.
Stocks across Asia were largely up, with Chinese internet company Tencent Holdings delivering its fastest revenue growth in seven years, stoking demand for tech stocks across the region. Australia one of the few exceptions with the S&P/ASX 200 index down 0.2 per cent in afternoon trading as dominant telecommunications group Telstra dropped 8.2 per cent to A$3.975 after slashing its dividend payments by about a third. Dual-listed Telstra's NZX stock fell 7.9 per cent to $4.29.
Telstra's drop "reflects what happens when you cut a dividend," said Craig Stent, head of equities at Harbour Asset Management. New Zealand's earnings season has been in line with expectations and "the larger cap companies are coming in within expectations and it's the positive expectations on dividends or earnings which get re-rated."
Fletcher Building rose 1.5 per cent to $8.42, extending its run of gains for the fifth day. The country's biggest construction company yesterday reported a 23 per cent fall in operating earnings, weighed down by unprofitable building contracts that it's still working through, and Harbour's Stent said there was still an "unclear outlook for that business".
Air New Zealand led the market higher, rising 2.1 per cent to $3.35, while Kathmandu Holdings gained 1.8 per cent to $2.33.
Freightways rose 1.7 per cent to $7.83 after the courier and information management company bought an Australian medical waste service for as much as A$10 million, while brokerage First NZ Capital lifted its price target on the company by 11 per cent to $7.10.
Outside the benchmark index, Skellerup rose 4.8 per cent to $1.74 after the rubber goods maker reported an 8 per cent gain in annual profit after tilting its industrial unit towards water instead of oil and iron ore.
Precinct Properties New Zealand increased 0.4 per cent to $1.285 after the property investor reported a 17 per cent gain in annual profit as it benefited from increased property valuations, and signalled plans to issue a $150m convertible bond.
"Precinct was in line with expectations, as it should be for a property company," Stent said.
Vector rose 1.8 per cent to $3.49 ahead of its scheduled earnings report next week. State-owned national grid operator Transpower, which counts Vector as its biggest customer, said the Auckland lines company accounted for 19.5 per cent, or $206.9m, of revenue in the 2017 June year, compared to 18.5 per cent, or $191.4m in 2016.
Meridian Energy, which is also scheduled to report next week, posted the biggest decline on the benchmark index, falling 2.8 per cent to $2.915. Meridian is Transpower's second-biggest customer accounting for 11.6 per cent, or $123.1m, of revenue in 2017, compared to 11 per cent, or $113.8m, a year earlier.
Contact Energy fell 1.1 per cent to $5.61, falling for a second day from a two-and-a-half year high after investors were impressed by the electricity generator-retailer's plans to change its dividend policy, enabling a bigger payout.
Spark New Zealand declined 0.8 per cent to $3.92 ahead of tomorrow's annual result, which analysts expect will show modest earnings growth. Steel & Tube Holdings, which is also scheduled to report, rose 2.2 per cent to $2.30.
Rakon fell 4.4 per cent to 22 cents after the company warned shareholders at today's annual meeting that its investment in internet-of-things network company Thinxtra will be a $2m drag on the company's bottom line. Still, it affirmed earnings guidance earlier this week that it would return to profit.
Evolve Education dropped 13 per cent to 87 cents, the lowest level since November 2015, after the early childhood education centre operator warned annual profit would fall by as much as 12 per cent due to lower than expected occupancy rates.