MARKET CLOSE: NZ stocks rise as kiwi falls; Pyne Gould leads

MARKET CLOSE: NZ stocks rise as kiwi weakens; Pyne Gould leads gainers, PFI falls

By Jason Krupp

Feb. 9 (BusinessDesk) - New Zealand stocks rose after a sudden drop in the kiwi dollar on the back of double recession fears increased the affordability of local stocks for overseas investors. Pyne Gould Corp. led gainers and Property for Industry Ltd. fell.

The NZX 50 Index rose 3.3 points, or 0.1%, to 3386.47. Within the index, 18 shares rose, 15 fell, and 17 were unchanged. Turnover was $98 million.

Finance Minister Bill English today said the government is concerned about a
double dip recession while addressing Parliament’s finance and expenditure select committee, echoing Prime Minister John Key's caution in the face of weak employment figures and a fast-slowing Australian economy. The economy shrank 0.2% in the September 2010 quarter. At the meeting English also announced this year's budget would be delivered on May 19.

"Bill English's comments today about the possibility of the economy moving
back into recession pushed the kiwi dollar 30 to 40 basis points lower which helped support our market," said James Lee, head of institutional equities at First NZ Capital.

The New Zealand dollar was last trading at 77.15 U.S. cents, down from 77.48 cents when the Finance Minister started speaking at 1pm.

Pyne Gould, the financial services company, rose 2.9% to 35 cents, after saying it plans to continue as a wealth management firm after distributing shares in its merged Marac Finance unit and repaying debt from the sale of its holding in PGG Wrightson Ltd.

The listed company, which spun off Marac into Building Society Holdings Ltd., will have two business units - Perpetual Group, which has about $587 million in funds, and Torchlight Group, an asset management firm established by director George Kerr.

The plans are contingent on the outcome of the takeover of Wrightson because PGC has a lock-up agreement for its 18.3% holding with Agria Corp. and New Hope Group of China, should their partial takeover succeed. In independent report to shareholders said PGW's substantial seed business is probably what Agria is looking to gets its hands on through the deal. Shares in Wrightson were unchanged at 59 cents.

Banking counters on the NZX were buoyed today after Commonwealth Bank of Australia posted first-half earnings growth and said it was 'cautiously optimistic' about 2011.

Westpac Banking Corp., the Australian lender, rose 2.6% to $31.70, and Australia and New Zealand Banking Group rose 2.3% to $32.73.

Sydney-based CBA said first-half profit rose 5% to A$$3.05 billion, driven by retail and business lending. The bank's local units, ASB and Sovereign, lifted first-half earnings 57% as the banking arm cut impairment charges and the insurer boosted its premium income. Cash net profit rose to $246 million, from $157 million a year earlier, and the insurer earned $45 million, up from $27 million.

Cavalier Corp., the listed wool buyer and carpet maker, was unchanged at $3.15 after its subsidiary, Cavalier Wool Holdings, applied to for Commerce Commission clearance to buy New Zealand Wool Services International Ltd.
The acquisition, if given the thumbs up by antitrust authorities, would give the company a dominant position in the country's nation’s wool scouring industry.

CWH is 50% owned by Cavalier Corp., with the remaining stake equally held by Direct Capital and Accident Compensation Corp.

Property for Industry, the commercial and industrial property investor, fell 1.7% to $1.15, leading decliners on the benchmark index. In its interim earnings forecast, First NZ Capital cautioned that the company's full-year earnings are likely to come under pressure due to tax depreciation changes, higher margins and fees.

Retailers declined on the day, shrugging off strong electronic card transaction numbers for January, which rose 2.2% in the month following a 1.2% decline in December.

Warehouse Group, New Zealand's biggest listed retailer, fell 1.1% to $3.59, Hallenstein Glasson Holdings, the clothing retailer, fell 1% to $3.88, and Pumpkin Patch Ltd., the children's clothing retailer, fell 0.7% to $1.49.

Fletcher Building Ltd., the country's biggest construction company, fell 0.9% to $8.15 after Crane Group's institutional shareholders indicated that they were willing to sell their holdings in the takeover target at A$10.07 a share.

Perpetual, Crane’s biggest institutional investor with a 7.5% holding, has indicated it will lodge its shares in Fletcher’s acceptance facility, along with a number of other eligible shareholders. Fletcher set up the facility for investors to signal their intent to sell.

(BusinessDesk)

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