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NZ shares mixed; Comvita up on China hopes

NZ Newswire logoNZ Newswire 24/03/2017 Jonathan Underhill

New Zealand shares were mixed on Friday, with about the same number of gainers and decliners in the NZX 50 Index.

Comvita rose on optimism about its prospects in China, Genesis Energy rose on perceptions that gentailers offer an attractive yield while Tegel Group fell amid concerns ample supplies of chicken are weighing on prices.

The S&P/NZX 50 Index rose 11.28 points, or 0.2 per cent, to 7,073.83. Within the index, 22 stocks rose, 20 fell and eight were unchanged. Turnover was $172 million.

Comvita, the honey products company, rose 2.3 per cent to $8.40. It reached $8.41 in intraday trading, the highest level this year.

Chinese authorities have reportedly eased their stance on e-commerce trade, where there has been a thriving grey market in the company's products.

Genesis rose 1.9 per cent to $2.13, Meridian Energy gained 0.4 per cent to $2.82 and Mercury NZ rose 0.2 per cent to $3.155.

"Gentailers are yielding above 8 per cent. There's not a lot of earnings growth but not too many shocks either," said David Price, a broker at Forsyth Barr. "That's better than the yield (investors are getting) at the bank."

The latest earnings season "wasn't enough to drive the market forward" and profit growth hasn't matched share price increases, he said.

The NZX 50 reached a record high 7585.29 on September 8 and has declined almost 7 per cent since then.

Part of the decline has been driven by "a massive pullback" in property stocks as rising interest rates dented the appeal of their dividend yield, Mr Price said.

Spark rose 0.2 per cent to $3.39 while TeamTalk rose 3.6 per cent to 86 cents.

TeamTalk said it plans to sell a 70 per cent stake in its problematic Farmside rural internet services provider to Vodafone New Zealand for $10 million, almost half what Spark New Zealand was willing to pay for the entire group.

Tegel fell 2.5 per cent to $1.15. "The news that is circulating is of further pricing pressure for chicken", Mr Price said.

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