MARKET CLOSE: NZ shares rise, Fletcher reaches 4-month high

Feb. 10 (BusinessDesk) – New Zealand shares rose as Fletcher Building climbed to a four-month high on speculation its earnings will recover from their current slump as the rebuild of Christchurch drives construction activity.

The NZX 50 Index rose 21.39 points, or 0.6 percent, to 3348.13. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $123 million, the third session in a row that turnover has been the highest this year.

Fletcher, the biggest company on the bourse and the construction company with the government mandate to oversee the rebuilding of Christchurch, rose 2.3 percent to $6.73.

Fletcher has already flagged a 10 percent decline in first-half earnings and a flat full-year result.

"Fletcher Building is coming under some demand ahead of their result," said Grant Williamson, director at Hamilton Hindin Greene. “Investors are starting to wake up to the fact that the Christchurch rebuild will happen. Investors are trying to second guess results."

Contact Energy, the biggest utility on the exchange, rose 2.7 percent to $4.94, leading gainers on the NZX 50. The shares, which have fallen 23 percent in the past 12 months, are rated ‘outperform’ based on the consensus of eight recommendations compiled by Reuters.

“Contact Energy stock has previously come under pressure and is now improving,” Williamson said.

Pumpkin Patch, the children’s clothing retailer, rose 2.5 percent to 83 cents and outdoor equipment chain Kathmandu gained 1.7 percent to $1.76.

Warehouse Group, the biggest retailer on the bourse, fell 1.1 percent to $2.68.

Retailers have so far posted mixed results after a tough year, with Warehouse’s results disappointing investors while home wares and sporting goods seller Briscoe Group posted a jump in earnings.

Briscoe fell 4.6 percent to $1.45 today.

Burger Fuel Worldwide, the local fast-food chain targeting growth in the Middle East, rose 11 percent to 70 cents after announcing it had signed a master license agreement to roll out stores in Qatar.

The burger chain, which went public in 2007, has signed an agreement with Al Siddiqi Group, which operates hospitality and retail clothing chains across the Middle East.

New Image, which makes colostrum-based health tonics, tumbled 26 percent to 14 cents. The company today said it fell into the red in the first half after Malaysian pharmacies and retailers discounted the manufacturer’s drink powders, eroding sales.

The company made a loss of $157,000, or 8 cents per share, in the six months ended Dec. 31, compared to a profit of $1.9 million, or 1.14 cents per share, a year earlier, it said in a statement.

Online auction site Trade Me rose 1 percent to $3.07 after the NZX said it will replace tapmaker Methven in the NZX 50 Index from Feb. 20. Methven fell 2.9 percent to $1.02.

(BusinessDesk)

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