MARKET CLOSE: NZ stocks get boost from quake work

MARKET CLOSE: NZ stocks rise as reconstruction task buoys Fletcher Building, Steel & Tube

By Jason Krupp

Sept. 6 (BusinessDesk) – New Zealand stocks rose for their fourth day straight, amid expectations the earthquake in Canterbury will stoke demand for building materials and construction, with Fletcher Building Ltd. and Steel & Tube Holdings pacing gainers on the day

The NZX 50 rose 35.7 points, or 1.1%, to 3143.1. Within the index 23 stocks rose, 11 fell and 16 were unchanged. Turnover was $103.1 million.

The NZSX Building Materials & Construction Index rose 4.8% to 1614.1 points, as the embattled sector rallied on the prospect of the post-earthquake reconstruction work, estimated at about $2 billion by the Earthquake Commission. That's equivalent to 26% of New Zealand's total annual construction expenditure, according to Westpac Institutional Bank, and comes amid predictions of a severe downturn for commercial construction.

Steel & Tube, a manufacturer of materials for the construction industry, rose 1.7% to $2.37, Fletcher Building, the biggest company the NZX, rose 5% to $8.41 and chemical and resin maker Nuplex Industries Ltd. rose 2.5% to $3.30.

“The stock market has done the logical thing in putting its capital towards construction today, but it will take some time to see how that pans out,” said Shane Solly, portfolio manager at Mint Asset Management. “There is a little bit of concern that the money that is going to be spent on the Canterbury region will be taken away from other parts of the country.”

New Zealand Oil & Gas Ltd., the energy exploration and mining company, rose 3.3% to $1.24 after the company announced that it is to buy back up to 2.2% of its issued capital, or 8.5 million ordinary shares, to bolster a share price directors say is “significantly below fair value.” Today’s price is still well down on last December, when its shares came close to $1.80.

Cavalier Corp., New Zealand’s only listed carpet maker, rose 3.1% to $2.64, Hallenstein Glasson Holdings, the High Street retailer, rose 2.3% to $3.94 and Telecom Corp., the nation’s biggest telephone company, rose 2% to $2.09.

DNZ Property Fund rose 1% to $1.04, holding its highest level since the stock exchange debut last month.

The property fund today announced the conditional sale of a property on the corner of Tauroa Street and State Highway One in Whangarei for $13.6 million. Proceeds will be used to repay bank debt.

Tower Ltd., the general insurance and funds Management Company, sank 3.1% to $1.85, pacing decline on the NZX 50.

The company said today the cost of claims from the earthquake will be $5 million before tax or $3.5 million after tax.

PGG Wrightson Ltd., the rural services company, fell 1.8% to 56 cents, APN News & Media Ltd., which publishes the NZ Herald and operates the Radio Network, fell 1.6% to $2.42, and takeover target NZ Farming Systems Ltd. fell 1.4% to 69 cents –1 cent below Olam International’s offer price.

Pike River Coal, the mining company, fell 0.9% to $1.08 after the company announced that the Midland railway line, which links its West Coast mine with the port, "suffered some track damage" though it re-opened yesterday afternoon.

Pike River also confirmed that it managed to load its 20,000 tonne second export shipment of hard coking coal at Lyttelton Port Co. despite some damage at the wharves.

Allied Farmers Ltd., the embattled finance company that took over the Hanover loan book last year, rose 17% to 2.8 cents.

(BusinessDesk)