MARKET CLOSE: NZ stocks rise, Telecom tips market into the black on fibre plan speculation

By Jason Krupp

Aug 9 (BusinessDesk) - New Zealand stocks closed up for the fifth time in six sessions, amid speculation Telecom Corp. will be eligible to participate in the New Zealand government's ultrafast broadband initiative if its proposed split is approved by shareholders.

The NZX 50 rose 9.86 points, or 0.3%, to 3054.5. Within the index, 15 stocks rose, 18 fell and 17 were unchanged. Turnover was $57.6 million.
Telecom, New Zealand's largest phone company and second largest stock on the bourse, rose 3% to $2.08.

Last week the company submitted a proposal to Crown Fibre Holdings to split its network and retail operations into two standalone companies, which would allow it to participate in the $1.35 billion project.

"Telecom has had another good day, with it looking much more likely that they will be able to put in a bid for the government's fibre rollout," said Craig Brown, senior investment analyst for ING New Zealand Ltd. "It is far from a given, but much more certain than when the bid was announced and it looked like they would be excluded."

Hallenstein Glasson Holdings, the High Street clothing retailer, rose 3.4% to $3.95, leading gainers on the day, as the stock continued to draw postive investor support on the back of better-than-expected earnings.

Last week the company announced full-year profit jumped as much as 57% to $28.8 million, as it eased off on discounting, improved its product range and benefited from a strong kiwi dollar. Sales in the 12 months ended August 1 rose 4.5% to $207 million.

Pyne Gould Corp., the rural services company, rose 2.4% to 42 cents, Restaurant Brands, the fastfood chain, rose 1.6% to $2.48 and pay-television operator, Sky Network Television Ltd., rose 1.4% to $5.09.

AMP NZ Office Trust, the commercial property investor, rose 1.4 percent to 72 cents after announcing it has poached Goodman (NZ) fund manager Scott Pritchard to head up the property trust as it transforms itself into a listed company.

Fisher & Paykel Healthcare Corp., the medical equipment manufacturer, rose 1.4% to $2.94 on indications of better market prospects after its leading competitor, ResMed, reported a 30% jump in full-year earnings and a two-for-one stock split.

Pacing decliners, Michael Hill International Ltd., the jewellery manufacturer, fell 4.4% to 65 cents. Fisher & Paykel Appliances, the whiteware maker, fell 3.9% to 50 cents and Pumpkin Patch Ltd., the children's clothing chain, fell 1.7% to $1.73.

Brown said prospects for retailers were "a little soggy" following poor sentiment in the consumer space in key markets such as the U.S. and Australia.

Shares in Allied Farmers Ltd., the finance company which bought the Hanover debt book last year, fell 22% to 3.5 cents after the company put plans to raise $19.3 million on hold because its Allied Nationwide Finance unit breached its trust deed, forcing it to pull its prospectus.

The parent company disputes the breach and the finance unit’s accounts are currently being audited. Chairman John Loughlin said he believes Guardian Trust can be placated and Allied Nationwide’s prospectus reinstated. The company faces a crunch when the government’s guarantee expires on Oct. 11 as its single B credit rating means it doesn’t qualify for the extended guarantee.

The decline in New Zealand property values weighed on property stocks, with the number of sales last month sinking to near their lows in 2008, at the height of the recession, according to QV.

ING Property Trust, which invests in healthcare related properties, fell 1.5%
to 68 cents, Goodman Property Trust fell 1.1% to 92 cents and Property For Industry Ltd., fell 0.9% to $1.13.

Values were 4.1 percent above those of July 2009, compared with a 5.2 percent decline in the previous month and have declined 0.8 percent since March.
Steel & Tube Holdings, which manufacturers steel products for the construction industry, fell 1.7% to $2.26.

(BusinessDesk)

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