Nov. 6 (BusinessDesk) - New Zealand shares rose for the first time in four sessions, with Air New Zealand leading after announcing it will cut an unprofitable route and eliminate 70 jobs. Fletcher Building paced the advance.
The NZX 50 Index rose 19.40 points, or 0.5 percent, to 3927.67. Within the index, 28 stocks gained, nine fell and 13 were unchanged. Turnover was $104 million.
Air NZ rose 3.8 percent to $1.24 and has climbed 34 percent this year. The airline will withdraw services between Hong Kong and London from March next year with the loss of some 70 London-based cabin crew jobs. At the same time it signed a strategic agreement with Cathay Pacific on the Auckland–Hong Kong route.
“The decision to exit from Hong Kong–London will enable more capacity to be redeployed onto the popular North American destinations of Los Angeles and San Francisco,” chief executive Rob Fyfe said.
PGG Wrightson, the rural services company controlled by China’s Agria, rose 2.9 percent to 35 cents. Restaurant Brands, the fastfood restaurant operator, rose 2.4 percent to $2.60 ahead of shedding its interim dividend of 6.5 cents tomorrow.
Rakon, the maker of crystal oscillators used in smart phones and navigation systems, jumped 9.8 percent to 45 cents. The company plans to cut 60 New Zealand jobs, or 14 percent of its local workforce, as it shifts more manufacturing to China and India in a bid to cut costs and widen profit margins.The plan is expected to improve margins by $10 million a year.
Fletcher Building, the nation’s biggest construction and building products group, gained 1.9 percent to $7.13. The shares are rated a ‘hold’ based on 11 recommendations compiled by Reuters, with a price target of $6.98.
Trade Me, the auction website part-owned by Australia’s Fairfax Media, fell 1.5 percent to $4.04, the biggest decline on the benchmark index. Tower, the insurer that agreed to sell its medical insurance business this week, fell 1 percent to $1.93.
Fisher & Paykel Appliance fell 0.4 percent to $1.27 after Haier reached its 90 percent target, allowing the Chinese company to compulsorily acquire the rest and delist the target. It is paying $1.28 a share.
Guinness Peat Group rose 1.8 percent to 58 cents after the investment firm liquidating its portfolio, accelerated its wind-down this week with some $125.9 million in asset sales.
Since selling its stake in Australian wealth manager ClearView Wealth last month, GPG has sold four direct investments and stands to reap some $34.7 million from Tower’s sale of its medical insurance unit. The company has sold more than half its portfolio since embarking on the liquidation plan last year.
Telecom fell 0.8 percent to $2.37 and Contact Energy dropped 0.8 percent to $5.31.