MARKET CLOSE: NZ shares mixed; NZOG up with crude

MARKET CLOSE: NZ shares mixed; NZOG gains, NZ Farming slips

May 13 – New Zealand shares were mixed, with gainers equaling decliners. Exporters such as Sanford Ltd. fell as the kiwi dollar held near a six-month high, while New Zealand Oil & Gas advanced with the price of crude oil.

The NZX 50 Index fell 1.13, or 0.04%, to 2811.56, the third daily decline. Within the index, 18 stocks fell, 18 rose and 14 were unchanged. Turnover was NZ$103.8 million.

Sanford, a fishing company that exports much of its catch, fell 1.8% to NZ$5.55. The New Zealand dollar recently traded at 60.71 U.S. cents, up from as low as 49.23 cents in early March. Fisher & Paykel Healthcare, which gets 80% of its revenue in U.S. dollars, fell 0.6% to NZ$3.18.

Campervan operator Tourism Holdings sank 3.9% to 50 cents. A high kiwi dollar makes New Zealand a more expensive travel destination at a time when global demand is weak.

NZ Farming Systems Uruguay, which develops dairy farms in South America, fell 4.3% to 45 cents. The price of milk powder fell 4.1% in Fonterra Cooperative Group’s online auction, the first decline after two months of gains, suggesting the recovery in global prices may be at a more sedate pace.

“In this new environment we’re likely to see bigger shifts than we have in the past,” said Kevin Wilson, a rural economist at ANZ National Bank. A 4% drop in a month “isn’t cause for undue optimism or pessimism. We’re at a point of stabilization in the market and looking for some slow improvement,” he said.

New Zealand Oil & Gas climbed 2.7% to NZ$1.53 as crude oil climbed amid signs demand for fuel in China isn’t abating and as the U.S. dollar weakened. China, second only to the U.S. in energy consumption, this week said imports of crude oil climbed 14% last month.

Brent crude traded at US$56.59 a barrel, near a six-month high, according to Reuters data.

Separately, the Inland Revenue Department today said the 2009 Budget will provide for the five-year continuation of a tax exemption that encourages oil and gas exploration. The exemption from tax on the profits of non-resident operators of offshore rigs and seismic vessels, introduced in 2004, was due to expire in December 2009. Legislation giving effect to the continued exemption will be part of a tax bill this year.

Pan Pacific Petroleum rose 2.4% to 44 cents on the NZX after it resumed trading after a halt to conclude new resources. Pan Pacific entered a farm in agreement with Premier Oil to earn a 15% interest in an exploration block offshore Vietnam and will contribute to drilling costs.

Pacific Brands, the maker of Holeproof and Bonds underwear, soared after it raised A$165 million in a placement, allowing it to repay debt and bolster its balance sheet. Analysts upgraded the company for the diminished financial risk and reduced threat it will be forced into a fire sale of assets.

“Equity holders now have increased assurance in ascribing value to their equity,” Macquarie Research analyst Greg Dring said in a report today. “The risk of banks undertaking asset sales for distressed prices to recover their loans has all but diminished.”

The stock trades infrequently on the NZX and jumped to NZ$1.05 today from 40 cents on April 6. On the ASX, the stock jumped 23% to 85 Australian cents.

PGG Wrightson rose 5.7% to NZ$1.48, leading gainers on the NZX 50 today. NZX Ltd. climbed 2.5% to NZ$8.20.

Telecom Corp., New Zealand’s biggest publicly traded company, rose 1.9% to NZ$2.63.

(Businesswire)

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