Profit reporting season is ramping up in the US, and so far traders appear to be encouraged by what they’re hearing from companies. (File photo)
The sharemarket rose as encouraging profit reports from US companies allayed fears of a recession.
The benchmark S&P/NZX 50 Index closed up 0.6%, or 70.749 points, to 11,269.76 on Thursday, after a 0.3% gain on Wednesday. On the broader market 86 stocks rose and 61 fell with $62 million shares traded.
Profit reporting season is ramping up in the US, and so far traders appear to be encouraged by what they’re hearing from companies.The S&P 500 rose 0.6%, tacking more onto its big gains from a day earlier, when the benchmark index soared 2.8%, its best day in weeks.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said positive sentiment from the US following better than expected earnings guidance was flowing through to the New Zealand market.
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“People are feeling that maybe the portending recession won’t be as bad as what people had first thought, and that has led to our market gaining two days in a row,” he said.
Among the larger stocks, Fisher & Paykel Healthcare rose 3.1% to $21.64, Meridian Energy gained 1.7% to $4.90, Mercury added 2.6% to $6, Ebos Group advanced 0.5% to $38.64 and Mainfreight was up 0.3% to $70.30.
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Pacific Edge announced it had substantially completed a commercial agreement with the Southern District Health Region for the use of its Cxbladder genomic biomarker tests.
Pacific Edge rose 5.3% to 80 cents after the cancer diagnostics company announced it had substantially completed a commercial agreement with the Southern District Health Region for the use of its Cxbladder genomic biomarker tests.
The agreement means 15 of New Zealand’s 20 administrative health regions, which together cover more than 75% of the country’s population, will now have access to the test via public healthcare.
Fletcher Building advanced 0.6% to $5.28 after Australian investment manager Allan Gray disclosed it had been buying the stock, taking its holding over the 5% threshold requiring a substantial shareholder notice to be filed. Allan Gray is a long-term investor that buys shares it considers undervalued.
“A lot of the near-term challenges that Fletcher Building is likely to face have been well-documented, are widely appreciated by the market and would probably be mostly priced in already,” said the firm’s equity analyst Sudhir Kissun.
“This, I think, should cushion the possible downside from here, and coupled with our view that the longer term prospects for the business appear sound, this gives us a bit of comfort to ride out the near-term challenges while we wait for the value we see to emerge.”
Livestock Improvement Corp gained 0.7% to $1.39 after the dairy genetics company posted a 16% increase in annual profit to $26.7m. The profit included a $15.4m gain on the sale of its automation business, and a $21.7m writedown on the value of its bulls. The company’s underlying earnings rose 15% to $25.7m, and it forecast earnings of $20m to $26m in the coming year.
South Port rose 1.3% to $7.67 after the Bluff port upgraded its profit expectations due to a late surge in bulk cargoes and a $1.3m pre-tax gain on an interest rate derivative. The company expects full-year earnings of $11.8m to $12.3m, ahead of its earlier expectation for $9.7m to $10m, and up from $10.7m last year.
Port of Tauranga rose 0.5% to $6.68 and Napier Port advanced 0.7% to $2.80.
Heartland Group gained 2.4% to $2.13. Market regulator NZ RegCo queried a 10.7% increase in the company’s share price from $2.17 at the close on July 13 to $2.17 at 12.50pm on July 20. Heartland Group chief operating officer Michael Drumm confirmed the company had complied with its continuous disclosure obligations.
Blis Technologies added 3.1% to 3.3c after chief executive Brian Watson told the annual meeting of shareholders that first quarter revenue rose 29% to $2.3m and the operating loss narrowed to $300,000 from $1.2m the previous year. Blis is changing its business model and strategy and Watson said the company now sees a clear path back to profitability.
IkeGPS jumped 10% to 75c after the firm said first-quarter revenue rose 162% to $6.8m, as it signed about $8m of new contracts and improved its gross margin. Chief executive Glenn Milnes said the first quarter was an outstanding period of growth and he expected the coming year to be another significant period of growth following 71% revenue growth last year.
– With AP
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