NZ shares rise in quiet trading; beat-up Pushpay, Fletcher find favour

Pushpay CEO Chris Heaslip. Photo / File

New Zealand shares rose as stocks that have been beaten up in recent months - such as Pushpay Holdings and Fletcher Building - attracted interest from investors seeking bargains in a market trading at high valuations.

The S&P/NZX 50 Index increased 18.2 points, or 0.2 per cent, to 10,012.77. Within the index, 20 stocks rose, 22 fell, and eight were unchanged. Turnover was $106 million.

Pushpay led the market higher, up 2.4 per cent at $3.79 on a volume of 265,000 shares, about two-thirds its 90-day average. The software developer has climbed 23 per cent since March 27, benefiting as a weaker kiwi dollar increases the value of its US-focused business. It has also recovered from a sell-off through the second half of last year.

Fletcher Building rose 2.1 per cent to $5.27 on a volume of 613,000 shares, about half its 1.22 million three-month average. The country's biggest listed construction company has gained 13 per cent since March 25, with some speculation that it might give investors a more optimistic update at the Macquarie investor conference that starts in Sydney tomorrow.

"Fletcher Building continued its upward trajectory. Value investors, in particular, are moving in to buy that stock," said Peter McIntyre, an investment adviser at Craigs Investment Partners.

McIntyre said the NZX50 is trading at an elevated level between 10,000 and 11,000, and it might drop back into the 9,000 range if there's some negative news. New Zealand's benchmark index is trading at a forward price-to-earnings ratio of 22.48, the highest across benchmark Asia-Pacific bourses tracked by Refinitiv. China's CSI 300 Index is second highest at 20.57.

"That's why you've seen the likes of Fletcher Building get support on the fact that it's a value play. If management can actually turn things around it would potentially be reasonable value," McIntyre said.

However, he warned it was hard to put too much faith in Fletcher given the number of downgrades it's issued during the past couple of years.

Vista Group International was the most traded stock on a volume of 3.3 million shares, more than 10 times its 314,000 average. The cinema analytics firm fell 0.8 per cent to $5.05. It's still the second-best performer on the NZX50 so far this year, up 35 per cent.

A2 Milk Co is the best performer so far this year, with today's 1.6 per cent increase to $16.77 extending the stock's gain this year to 51 per cent.

Chorus posted the biggest decline, down 3.6 per cent at $6.03 on a volume of 188,000 shares, compared to its 90-day average of 532,000 shares. It's still the third-best performer so far this year, up 25 per cent.

Trade Me Group increased 0.2 per cent to $6.44 on a volume of 1.8 million shares ahead of its final day of trading on May 2. The online marketplace operator de-lists from the NZX and ASX the following week.

Of other companies trading on volumes of more than a million shares, Meridian Energy fell 1.5 per cent to $4.08, Spark New Zealand rose 1.5 per cent to $3.64, and Precinct Properties New Zealand increased 1.3 per cent to $1.59.

Skellerup Holdings increased 0.5 per cent to $2.19 after announcing a $6.5m acquisition of Nexus Foam. The bolt-on acquisition is expected to immediately boost earnings.

Summerset Group rose 1.1 per cent to $5.66 on a bigger volume than normal of 548,000. The retirement village operator and developer holds its annual meeting tomorrow. Rival Ryman Healthcare was up 1.2 per cent at $12.03 and Metlifecare rose 1.9 per cent to $4.84.