MARKET CLOSE: NZ shares gain; FRE, PPL up

MARKET CLOSE: NZ shares gain as growth comes back into view, FRE up

July 30 (BusinessWire) – New Zealand shares rose for the third straight day as optimism the globe will avoid a double-dip recession. Shares including Freightways Ltd. and Pumpkin Patch led the advance.

The NZX 50 Index gained 14.09, or 0.5%, to 3047.11. Within the index, 20 stocks rose, 19 fell and 11 were unchanged.

Freightways rose 2.6% to $2.82. The courier firm this week announced it had set up the infrastructure to allow traders on the TradeMe website to arrange shipments through the company’s network.

APN New & Media, the publisher of the New Zealand Herald, gained about 2% to $2.60 and children’s clothing retailer Pumpkin Patch rose 1.7% to $1.84.
Australia’s S&P/ASX 200 Index fell 0.6% and Japan’s Nikkei 225 Index slipped 1.6% today. Asia’s equity markets got a cold wind from the U.S., where chipmakers disappointed the market with their outlook statements. Weighing on sentiment, Japan’s industrial production unexpectedly slowed while the jobless rate rose.

Downgrades set a negative tone for shares in Asia, said Angus Gluskie, who overseas US$300 million at White Funds management in Sydney. Still, earnings from European and U.S. companies “have surprised on the upside” and investors should be careful “not to confuse a lower rate of growth with no growth.”

“Equities are as cheap as anything on any historical measure – people are still pricing in a fear factor associated with a double-dip recession,” he said. The chances of that are diminishing and the market will start to price in the growth potential, Gluskie said.

PGG Wrightson Ltd. fell 1.9% to 53 cents after halting negotiations on internalising NZ Farming Systems Uruguay's management contract pending the outcome of Singapore-based Olam's 55 cents a share takeover offer which values the Uruguay company at $134.3 million. Farming Systems traded at 56 cents today, one cent above the offer.

Telecom Corp. has finally rid itself of its struggling Australian retail business, confirming it sold the consumer division of its AAPT unit for A$60 million to iiNet Ltd. The shares gave up earlier gains to end the day at $1.99.
The phone company also sold its 18.2% stake in iiNet for A$70 million, about A$11 million below the carrying value as at June 30.

Pyne Gould Corp. fell 2.4% to 41 cents and Steel & Tube declined 1.8% to $2.21.

(BusinessDesk)

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