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Tegel, Vector lead local shares higher

NZ Newswire logoNZ Newswire 20/12/2016 Sophie Boot

Tegel was the best performer, up 2.9 per cent to $1.40. © Hagen Hopkins/Getty Images Tegel was the best performer, up 2.9 per cent to $1.40. New Zealand shares rose as Tegel Group Holdings continued its rebound from last week's record low while Warehouse Group dropped after weaker earnings guidance.

The S&P/NZX 50 Index gained 3.41 points, or 0.05 per cent, to 6,789.66. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $151 million.

Warehouse Group was the worst performer on the index, down 8 per cent to $2.87 after New Zealand's largest publicly listed retailer said profit may fall between 10 and 15 per cent in the first half of its financial year on a weaker-than-expected run up to Christmas.

Rickey Ward, NZ equity manager at JBWere, said the extent of the sell-off was a surprise, as with the rise of online shopping, competition in retail is well-known.

"I don't know if that should have been as big a surprise as what the share price tells us. Retail is difficult and highly competitive and it's really hard to think they'd be immune," Ward said.

"It's confirmation of a theme that's well known. Thankfully Warehouse is an incredibly diverse company these days, so it's still making a $40 million profit in the first half. It's not a bad company, they're just feeling difficult times."

Metro Performance Glass fell 3.1 per cent to $1.87 and Mercury NZ dropped 2.2 per cent to $2.93.

Tegel was the best performer, up 2.9 per cent to $1.40. The shares hit a record low last Thursday after the company said it would miss its forecast earnings as a glut of chicken keeps a lid on domestic prices and rising freight costs squeezes margins.

Vector gained 2.2 per cent to $3.22, Ryman Healthcare rose 1.7 per cent to $8.34, and Tourism Holdings gained 1.5 per cent to $1.41.

A2 Milk declined 1.5 per cent to $2.04.

Outside the main index, Smiths City Group fell 1.4 per cent to 69 cents. The appliance and furniture retailer reported a 46 per cent drop in first-half profit as it faced new restructuring costs and a year-earlier gain on its Colombo St store wasn't repeated, even as underlying earnings and sales rose.

Rakon jumped 28 per cent to 22 cents, Sealegs advanced 17 per cent to 10.8 cents and AFT Pharmaceuticals was unchanged at $2.75.

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