Top Shows

Contact ONE News

Chorus leads charge in strong day's trading

Published: 7:33PM Friday February 08, 2013 Source: ONE News

New Zealand shares rose, led by network company Chorus, after the government pushed back draft plans to regulate its prices pending a wider review.

Summerset Group rose to a new record on optimism about returns from retirement villages.

The NZX 50 Index gained 30.48 points, or 0.7%, to 4225.72. Within the index, 26 stocks rose, 17 fell and seven were unchanged. Turnover was a higher-than-average $195 million, with increased trading in Chorus and SkyCity Entertainment Group.

Chorus, the network company spun off from Telecom in 2011, jumped 10% to $3.15, regaining about half its losses since the Commerce Commission made a draft recommendation on cutting its prices in early December. Telecom gained about 2 percent to $2.35.

"For Chorus, even though we still don't know the outcome, it gives the market confidence the uncertainty will disappear," said Greg Easton, an adviser at Craigs Investment Partners. "There's confidence there is still an investment case for Chorus and the whole sector."

Summerset Group, the retirement village operator that listed in late 2011, rose 3.6% to $2.57 - up from its initial public offering price of $1.40.

"People are buying into the story that they want Ryman-type returns," Easton said.

Rival resthome operator Ryman's shares have almost doubled in the past two years, but slipped 0.7% to $4.55 today.

SkyCity, the hotel and casino group, rose 1.5% to $4.09. The company is due to post its interim results next week and analysts are expecting a strong result, as they are with auction site Trade Me, up 2.2% to $4.28 today.

"We're expecting good results from them and analysts are picking them to deliver," Easton said. "They'll get hammered if they don't deliver."

The NZX announced after the close of trading today that Trade Me will join the NZX 10 Index effective February 18, replacing Sky Network Television whose index weighting is lowered because of News Corp's 44% cornerstone shareholding. The pay-TV company rose 0.2% to $5.18.

Retailers were mixed. Warehouse Group gained 1.5% to $3.34 and Pumpkin Patch rose 1.5% to $1.35. Clothing chain Hallenstein Glasson Holdings fell 1.1% to $5.22 and outdoor equipment retailer Kathmandu declined 0.5% to $2.23.

Skellerup, which makes rubber goods and milking equipment, fell 1.2% to $1.65 and was the biggest decliner on the benchmark index.

Air New Zealand fell 0.8% to $1.26. The airline is a major customer of Wellington International Airport, which the Commerce Commission said was extracting excessive profit. The airport disputes the regulator's view.

Infratil, which owns a half stake of the airport, declined 0.8% to $2.41.

Fletcher Building, the biggest company on the NZX 50, rose 0.7% to $8.96 and was the most heavily traded stock by value.