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MARKET CLOSE: NZ shares rise; Freightways paces gainers

MARKET CLOSE: NZ shares rise; Freightways paces gainers, Vector falls

By Jason Krupp

Dec. 23 (BusinessDesk) - New Zealand stocks rose for a second session after weaker-than-expected third-quarter economic growth figures failed to dent investor appetite for higher-yielding stocks. Freightways Ltd. paced gainers on the exchange while Vector Ltd. fell.

The NZX 50 Index rose 11.38 points, or 0.3%, to 3,333.75. Within the index, 23 stocks gained, 15 declined and 12 were unchanged. Turnover was $58.9 million.
Government figures today showed gross domestic product contracted 0.2% in the third quarter and narrowly avoided recession, as second-quarter growth was revised down to just 0.1%.

Export volumes shrank 1.1% in the period with a 17% slump in meat products and a 6% decline in dairy, ending two quarters of gains. Primary industry growth fell 2.8%, led by declines in fishing, forestry and mining.

Freightways, the express package company, rose 1.6% to $3.15. The stock has a dividend yield of 8.9%, based on the past 12 months. By comparison, FedEx Corp. has a dividend yield of 0.5% and the average for stocks in the Standard & Poor's 500 Index is 1.7%.

Guinness Peat Group, the investment holding company, rose 1.4% to 71 cents, and Argosy Property Trust, the listed property investor, rose 1.4% to 73 cents.

Contact Energy Ltd., the third biggest company on the exchange, rose 1.3% to $6.25 after the Electricity Authority said it would begin a formal review in high wholesale electricity spot prices in the New Year.

Prices have been trading well above $200 per Megawatt hour at regular intervals since Dec. 1, up from an average of $55 per MWh in the last few months.

Telecom Corp., New Zealand's biggest telephone company, rose 0.9% to $2.24 after the Commerce Commission released it draft recommendation on mobile termination rates, which if accepted, could dramatically slash the price of mobile calls and texts.

The commission recommended wholesale pricing for voice calls to a mobile network be set at a cost-based benchmark, starting at a rate of 4.6 cents per minute. For text it adopted a bill and keep, or zero charge, approach, citing the low cost of terminating texts and the balance in inter-carrier traffic.

"In terms of EBIT it is not material for Telecom, but it is a lot more significant for Vodafone," said David Price, a broker for Forsyth Barr.

Fletcher Building Ltd., the country biggest construction company, rose 0.5% to $7.83 after it applied for clearance from New Zealand antitrust regulators to buy Australia's Crane Group for $740 million.

The move, while procedural, is a sign of the construction company's continued ardor for Crane after the takeover target's board recommended shareholders reject the A$9.35 cash and share offer saying it undervalued the company.

Crane shares have risen 22.8% since Fletcher's bid, and were last trading at $9.42 on the ASX.

"If you look at performance of Crane it has been rather disappointing," Price said. "That 15% of the stock has already traded gives you an indication of what some of the larger companies think of the bid."

Abano Healthcare Group, the specialist healthcare clinic investor, rose 0.6% to $4.84 after it extended its pathology contracts in the Greater Wellington region for another three years. The $75 million contracts with Hutt Valley and Capital & Coast District Health Boards build on existing five-year deal with Abano subsidiary Aotea Pathology.

Air New Zealand Ltd. was unchanged at $1.50 after the national carrier announced it was teaming up with Bank of New Zealand on a co-location trial from the middle of next year. The details of the partnership agreement between Air NZ Holidays branded stores and the BNZ are still to be generated, including trial store locations.

Telstra Corp., the Australian telephone company, was unchanged at $3.72 after the company said it would write about A$138 million (NZ$186.2 million) off its China-based Octave mobile business.

Telstra bought 67% of Octave, which supplies consumer mobile content and technical services for mobile music, for A$259 million in February 2009.
Vector Ltd., the Auckland based electricity lines company, fell 2.1% to $2.30, pacing decliners on the bourse.

Auckland International Airport Ltd., the country's busiest gateway, fell 0.5% to $2.16, after government raised disclosure requirements on regulated airports in a bid to improve transparency and competition.

Under the change Auckland, Wellington, and Christchurch gateways will now be required to provide regular updates on historical financial information, quality measures; pricing information, and revenue forecasts from the start of the 2012 financial year.

PGG Wrightson Ltd., the rural services group, fell 2% to 84 cents, Property for Industry, the commercial property investor, fell1.8% to $1.12, and Warehouse Group, New Zealand's biggest listed retailer, fell 1.6% to $3.59.


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