MARKET CLOSE: NZ stocks bounce back after quake; Tower gains

MARKET CLOSE: NZ stocks bounce back after quake; Tower leads gainers, Kathmandu falls

By Jason Krupp

Feb. 23 (BusinessDesk) - New Zealand stocks rose, paring some of their losses after yesterday’s 6.3 magnitude earthquake in Christchurch. Tower Ltd. lead gainers after saying its exposure will be capped by reinsurance arrangements, while Kathmandu Holdings fell.

The NZX 50 Index rose 13.36 points, or 0.4%, to 3372.06. Within the index, 17 stocks rose, 23 fell, and 10 were unchanged. Turnover was $111.2 million.

Tower, the general insurer, rose 4.2% after it said reinsurance agreements are likely to limit its costs from yesterday’s disaster to $5 billion. Shane Solly, portfolio manager for Mint Asset Management, said the stock was oversold yesterday but had bounced back in the wake of kneejerk selling.

Guinness Peat Group, the investment holding company that owns a controlling stake in Tower, was unchanged at 74 cents.

Pyne Gould Corp., the financial services company, rose 3.2% to 32 cents, with the share price recovering some of the ground it lost yesterday after its corporate headquarters collapsed in central Christchurch. The company said that while the disaster would have an operational impact, it will not affect its capital position as the building was leased.

Contact Energy Ltd., New Zealand’s third-biggest listed company, rose 1.5% to $6.20. The company yesterday said it plans to spend $623 million to build the 159 Megawatt Te Mihi geothermal plant, and will look to shareholders for some of the funding. The company made a profit of $78.8 million, excluding one-off items, in the six months ended Dec. 31, compared to a $79 million profit a year earlier.

Fletcher Building Ltd., the country’s biggest construction firm, rose 0.8% to $8.55, amid speculation that the company would again be chosen to lead rebuilding efforts in Christchurch. The company, which won the contract to repair more than 50,000 building damaged in the previous earthquake on Sept. 4, today said its residential repair programme in Canterbury is temporarily on hold while resources are directed to emergency response following yesterday's quake.

“You can say with some reasonable confidence that there will be more construction, but when it comes and to what standard is anyone’s guess,” Solly said.

Steel & Tube Holdings, the maker of steel products used in the building industry, fell 0.4% to $2.55.

Charlie's Group, the juice maker, was unchanged at 22 cents after it posted a 56% jump in first-half profit, driven by a surge of sale in Australian where the juice maker’s products are sold through the Coles supermarket chain.

Profit was $1.1 million in the six months ended Dec. 31, from $700, 000 a year earlier. The figures exclude profit from the sale of a building in the previous period.

Delegat’s Group, the wine-maker that bought out smaller shareholders in contract grower Oyster Bay Marlborough Vineyards Ltd., was unchanged at $2 after it cut its full-year profit forecast, citing sluggish global markets and an over-supply of grapes.

The company expects to make an operating net profit of between $20.5 million and $25.5 million in the 12 months ended June 30, down from a previous forecast of between $23 million and $26 million.

Kathmandu, the outdoor clothing retailer, fell 5.2% to $2.01, leading decliners on the NZX 50 after it said its Christchurch head office and New Zealand distribution centre had been damaged in the earthquake. The company said it doesn't know when both premises can be fully reoccupied. In the meantime it is being managed out of its Melbourne offices.

Hallenstein Glasson Holdings, the clothing retailer, fell 3.1% to $3.71 following the resignation of chief executive Stephen Timms, who is returning to Australia for family reasons. His departure comes after the company last month downgraded its profit outlook, with net profit for the six months to Feb. 1 likely to come in at between $7 million to $ 7.4 million, a decrease of 13% to 18% on the previous year's profit of $8.5 million.

New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 2.3% to 85 cents after the company posted a net loss was $99 million in the six months ended Dec. 31, from a loss of $6.5 million a year earlier. Pike-related impairments amounted to $98.6 million and unrealised after tax foreign exchange losses were $5.2 million.

“Most investors would have been aware of the potential charge, but the charge may have been more than people were expecting,” Solly said.

Nuplex Industries Ltd., the industrial resin and chemical manufacturer, fell 1.1% to $3.59 after it said it will pay $3 million to shareholders as part of a settlement with the Securities Commission for failing to disclose it breached a debt covenant in 2008.

The company and regulator reached an agreement where people who bought and kept shares between Dec. 22, 2008, and Feb. 18, 2009, will be offered compensation and the commission will get $150,000 to cover the costs of its investigation.

Lyttelton Port Co., which operates Christchurch’s main port, fell 4.4% to $2.20 after reports that its facilities had suffered extensive damage as a result of the earthquake. The company said it will take 24-hours before a full assessment can be completed. In the meantime all rail shipments to the port had been stopped due to a slip on the city-side of the connecting tunnel to Lyttelton.

Opus International Consultants Ltd., the NZX-listed engineering firm, today lifted its 2010 profit by 18% as the company took advantage of increased government infrastructure spending in several of the countries where it operates.

The Wellington-based company made a net profit of $22 million, or 15 cents per share, in the 12 months ended Dec. 31, up from $18.6 million, or 13 cents a share, a year earlier. The shares fell 0.5% to $2.06.

Broken Hill Prospecting Ltd., the newly dual-listed cobalt miner, was unchanged at 28 cents after it said it may double its inferred cobalt resource in outback New South Wales to 30 million tonnes with a newly approved drilling programme.

(BusinessDesk)

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