MARKET CLOSE: NZ stocks rise; Wrightson paces gainers, Nuplex falls

By Jason Krupp

March 31 (BusinessDesk) - New Zealand stocks rose, extending their rally for a 12th day, as upbeat sentiment on global equity markets made up for signs of deteriorating business confidence at home. PGG Wrightson Ltd. paced gainers after Agria extended its partial takeover offer, and Nuplex Industries Ltd. fell.

The NZX 50 Index rose 6.69 points, or 0.2%, to 3,439.84. Within the index, 22 stocks rose, 15 fell, and 13 were unchanged. Turnover was a higher-than-usual $160.6 million, as traders wrapped up their accounts for the end of the month and end of the quarter.

Wrightson rose 2% to 51 cents after Agria Corp. extended its bid to take a controlling stake in rural services firm for another week as it struggles to win over shareholders. New York Stock Exchange-listed Agria has pushed out the deadline to April 23 for shareholders to take up its 60 cents a share offer and give up just over half the company.

"It looks like people want a cleaner offer for the business, an offer to buy all of it not just 50%," said Rickey Ward, domestic equities manager at Tyndall Investment Management.

Fletcher Building, the country's biggest construction firm, rose 1.5% to $9.34, a fresh three year high, having yesterday announced that it had secured almost 93% of target Crane Group’s shares and will force compulsory acquisition on the remaining shareholders.

The company passed the 90% level required to enforce a full takeover two days before the offer closed, after it called the bid unconditional when it convinced enough shareholders to give it control, having previously made full control a requirement on the deal.

Scott Technology, the automated meat processing machinery manufacturer, rose 2.1% to $1.45 after it announced it had bought a controlling stake in electromagnet manufacturer HTS-110 Ltd., and said it’s looking at a rights issue to help fund the deal.

Scott will pay $4.4 million for almost 51 percent of HTS-110 of Wellington, with the expectation the target will play a key role in developing a New Zealand high temperature superconductor industry.

Nuplex, the industrial chemical and resin manufacturer, fell 1.9% to $3.10, pacing decliner on the NZX 50 amid investor speculation it will slash its earnings outlook.

That comes after the company's first-half profit fell 10% to $31.1 million in the six months ending Dec. 31. citing adverse currency movements, rising raw materials prices and a $1.8 million settlement with the New Zealand Securities Commission.

"People have taken a view that the company could is imminent for a profit downgrade, though the company disputes this," Ward said.

NPX's shares have declined 8.6% in the past month

Kiwi Income Property Trust, New Zealand biggest listed property investor, fell 1.5% to $1, its lowest level in 10 days. The company today said it has taken a $52.1 million hit on the Christchurch earthquake, and will write down the value of its property portfolio by 4%.

The property investor’s Northland Shopping Centre and PricewaterhouseCoopers Centre in Christchurch make up the bulk of the $81.9 million write-down to $1.98 billion in the year ended March 31, after last month’s quake killed more than 180 people and caused as much as $15 billion of damage around New Zealand’s second-biggest city.

Guinness Peat Group fell 0.6% to 79 cents after it announced executive director Gary Weiss had resigned, and chairman Mark Johnson will seek re-election to the board as the diversified investment firm winds down.

Weiss will vacate his role at the end of April, but will stay on as chairman of GPG’s thread-making company Coats Plc., for at least 12 months and provide consultancy services to the GPG board if needed.

Comvita, the honey products manufacturer, fell 3.3% to $1.45 after it slashed its earnings outlook and said it may return a loss to shareholders this year as tax depreciation changes and its ongoing legal battle in the U.K. weigh on earnings.

The company expects net earnings to come in the range of between profit of $400,000 and a loss of $200,000 for the 12-months ending March 31. That compares to a net profit of $5 million in the previous year. Revenue for the year is seen at $81 million compared to $84.9 million previously reported. On a normalised basis, net profit is forecast at between $2.8 million and $3.4 million, down from $5.7 million previously reported.

New Zealand's business confidence fell plummeted this month, and while the decline was worst in Canterbury, the latest survey shows gloom has set in nationwide following the devastating earthquake which struck Christchurch on Feb. 22.

A net 8.7% of businesses expect worse times ahead, according to the National Bank Business Outlook, a turnaround from last month's survey where a net 34.5% were upbeat about the next 12 months. That marks the second-largest monthly drop in the survey's history.

(BusinessDesk)

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