NZ shares gain as Z and Precinct rise; Tower hits record low

New Zealand Stock Markets

New Zealand shares rose, led higher by Z Energy on lingering optimism over the transport fuels company's outlook and Precinct Properties New Zealand which is tapping the listed debt market. Tower hit a record low.

The S&P/NZX50 Index gained 31.57 points, or 0.4 per cent, to 8,008. Within the index, 23 stocks rose, 20 fell and seven were unchanged. Turnover was $284 million.

Z Energy led the index, up 3.5 per cent to $7.48. Last Thursday, the company reported it had lifted first-half profit 10 per cent as the acquisition of Chevron New Zealand's retail network swelled sales, and expects to pay bigger dividends under a new policy.

Precinct Properties gained 2.3 per cent to $1.315. The listed commercial property investor is currently raising up to $100 million from a seven-year bond offer to repay bank debt.

 

Kiwi Property Group rose 0.4 per cent to $1.325. The company, which manages a $3 billion portfolio of shopping centres and office buildings, is selling its Majestic Centre office tower in Wellington to 

Investec Australia Property Fund for $123.2 million.

Contact Energy was the worst performer, down 3 per cent to $5.58, while Metro Performance Glass dropped 2.2 per cent to 90 cents, matching an all-time low, and Scales Corp fell 1.8 per cent to $3.85.

Outside the benchmark index Tower shares fell 7.9 per cent to 70 cents as investors weigh up whether the $70.8 million of new capital they're being asked to provide will provide enough of a buffer against lingering Canterbury earthquake claims that have repeatedly surprised the insurer.

The stock fell as low as 64 cents, the lowest since Tower listed in 1999, after the insurer announced plans to sell shares at 42 cents apiece in a fully underwritten one-for-one pro-rata renounceable entitlement offer. The funds raised will let Tower repay a $30 million loan from Bank of New Zealand and boost its surplus margin above the regulatory solvency capital.

Suncorp Group subsidiary Vero Insurance, which would have paid $1.40 a share to buy Tower had it not been blocked by the regulator, has committed to the capital raise.

Plexure Group gained 18 per cent to 13 cents. The mobile voucher firm, formerly called VMob, reported a narrower net loss in the first half to $195,000 as it lifted revenue to $5.4 million from $3.6 million and continued to streamline the business. The result was ahead of guidance.

Mercer Group was unchanged at 36 cents. The stainless steel fabricator said Fonterra Cooperative Group's final loss from the collapse of a silo it designed and supplied was $20 million.