MARKET CLOSE: NZ shares gain, paced by GMT, FPA

MARKET CLOSE: NZ share rise on offshore sentiment; GMT, FPA, GPG pace gains

By Jason Krupp

Sept. 13 (BusinessDesk) – New Zealand stock rose for a second session, as investor appetite for risk was bolstered on higher-than-expected wholesale inventories in the U.S. and a faster improvement in China’s industrial output. Goodman Property Trust, Fisher & Paykel Appliances Holdings, and Guinness Peat Group paced gainers on the day.

The NZX 50 rose 17.5 points, or 0.6%, to 3,178.4. Within the index 26 stocks rose, 11 fell and 13 were unchanged. Turnover on the day was $86.4 million.

Inventories at U.S. wholesalers rose in 1.3% in July by the most in two years, an unexpected surge that suggested confidence in the economic recovery, while in China industrial production gained 14% in August from a year earlier, beating median estimates by 1%.

“It looks like a pretty typical Monday, and we’ve firmed up on the positive tone from offshore,” said Grant Williamson, director at Hamilton Hindin Greene. “The overseas markets continue to improve - we just need economic releases to support that and we could be for a pretty good week. The U.S. market had been negative for some time and the hope out there is it shows some sort of bottom.”

Goodman Property, the listed property investor, rose 2.1% to 98 cents, Fisher & Paykel Appliances rose 1.9% to 54 cents, and U.K.-based investment company Guinness Peat Group rose 1.6% to 64 cents.

Telecom Corp., New Zealand’s biggest telephone company rose 1.5% to 2.07, and Vector Ltd., the lines company, rose 1% to $2.11.

Williamson said the selloff in the stocks last week “was a bit knee jerk” after Crown Fibre Holdings announced that it would opt for a region-player plan rather than a single player strategy.

“I expect both of these players to play a significant part in further rollouts,” Williamson said.

Fletcher Building Ltd., the biggest company on the NZX 50, rose 1.3% to $8.36, and Steel & Tube Holdings, which produces materials for the construction industry, rose 1.2% to $2.53.

Both companies are expected to benefit from the reconstruction efforts in the wake of the Canterbury earthquake, with the repair bill expected to be in the region of $4 billion.

Separately, the Treasury today quashed speculation that the earthquake would be an economic positive for the region as fund flow in from reinsurers offshore, and said any benefits derived the 7.1 magnitude earthquake would be negated by the destruction of wealth caused.

Warehouse Group, the biggest retailer on the NZX 50, rose 1.4% to $3.75, its second daily gain after raising its dividend payment ratio and announcing a special payment of 5 cents a share, "in a sign of the board’s confidence in the company’s ability to continue generating solid operating cash flows."

OceanaGold Corp., the gold miner, rose 3.2% to $4.80 after the company announced it is set for a $30 million windfall at the current gold price after it bought back its hedge book, according to media reports.

The company paid US$72 million for the book at the end of March, and was making the $30m bottom-line prediction based on the fact that it now made extra upside on gold prices above NZ$1565 an ounce.

Australia & New Zealand Banking Group rose 1.2% to $30.50. The lender today named David Hisco as chief executive of its New Zealand unit, ANZ National, replacing Jenny Fagg, who stood down to concentrate on battling cancer.

SkyCity Entertainment Group, the casino and hotel operator, rose 0.4% to $2.86 after data from Statistics New Zealand showed hotels recorded a 4% increase in overnight stays in July, boosted by more international visitors.

International guest nights in July rose 2% compared to the same month in 2009, and rose 4% when compared to the year before that.

Rakon Ltd., which manufactures crystal oscillators used in cellphones and GPS units, fell 4.2% to $1.14, pacing decliners on the main board. Pyne Gould Corp., the financial services firm, fell 2.4% to 41 cents, and general insurer Tower Ltd. fell 1.6% to $1.84.

NZ Farming Systems Uruguay Ltd., the South American dairy farm operator, fell 1.4% to 69 cents after Olam International, which is bidding for a majority stake in the company, announced that it had increased its shareholding to 41%.

Ecoya, the scented candle company which recently acquired cosmetics company Trilogy in a deal worth $20 million, had its stock halted from trading ahead of a bookbuild for a share placement.

The placement comes after Ecoya paid $10 million in cash for Trilogy, with a further earn out payment of up to $10m to follow, half in cash and half in $1 shares of Ecoya dependent on the cosmetics company reaching earnings targets next year.

(BusinessDesk)

© Scoop Media