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MARKET CLOSE: NZ stocks rise on offshore momentum

MARKET CLOSE: NZ stocks rise on offshore momentum; Telecom rises, Rakon falls

By Jason Krupp

Aug. 16 (BusinessDesk) - New Zealand stocks rose for a fourth session with the exchange riding out positive momentum on Wall Street as the Standard & Poor's 500 Index regained all the value lost since the U.S. credit rating downgrade. Telecom Corp. rose, and Rakon Ltd. fell.

The NZX 50 Index rose 21.11 points, or 0.7%, to 3,273.74, the highest level since Aug. 5. Within the index, 19 stocks rose, 20 fell and 11 were unchanged. Turnover was a lower than usual $84.8 million.

"We opened up quite strongly on the back of the positive offshore close but we've calmed a bit through the afternoon," said Greg Easton, an adviser with Craigs Investment Partners. Investors are still maintaining a healthy sense of caution as "any shakes will filter their way down here quickly, with a lot of potential for headline risk still out there," he said.

Telecom, the country's biggest phone company, rose 3.1% to $2.62, leading gainers on the exchange ahead of the release of its annual results on Friday. The company is expected to deliver a full-year net profit of $354 million, according to a forecast by retail broker Craigs, square in the middle of the company's earning guidance range.

Pumpkin Patch Ltd., the children's clothing chain, rose 3.1% to $1.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, rose 2.6% to $1.17, its highest level since July 27.

Infratil Ltd., the infrastructure investment company, rose 2.4% to $1.73 after it yesterday announced it is upgrading its insurance policy on Wellington Airport in the wake of the Christchurch earthquake. The company has secured cover on lost profits for up to 18 months.

Fisher & Paykel Healthcare Corp., the manufacturer of breathing masks and respirators, rose 2.2% to $2.32. AMP Ltd., the Australian wealth manager, rose 2.2% to $5.18. Kathmandu Holdings, the outdoor clothing and equipment retailer, rose 1.5% to $2.01.

Fletcher Building Ltd., the country's biggest listed firm, rose 0.4% to $7.73. The company is scheduled to release its full year results tomorrow morning, and is expected to report a full-year net profit of $325.9 million, according to estimates by broker Forsyth Barr.

Rakon, the manufacturer of crystal time components used in electronics, fell 3.4% to 86 cents, leading decliners on the exchange. The company is rated as 'outperform' according to the consensus view of five analysts compiled by Reuters, with a median target price of $1.15.

New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 3.1% to 62 cents.

Restaurant Brands NZ, which operates the KFC, Pizza Hut and Starbucks franchises in New Zealand, fell 3% to $2.30 after it came under fire from the Unite Union for reportedly saying it would not pay workers who were prevented from coming to work by snow storms.

Today Prime Minster John Key urged employers to take show some kindness on employees, saying he was sure the bulk of companies would not penalise their workers who are snowed in.

Westpac Banking Corp., New Zealand’s biggest lender by assets, fell 2.3% to $25.45 after third quarter cash earnings fell 2% to A$1.55 billion, though operating income rose 1.5% as the bank widened margins across the board.

The bank's New Zealand unit reported a strong third quarter, outperforming its Australian parent, with lending growing by almost 2% in local dollar terms in both the business and home loan segment, outpacing the 1% total lending growth across the group.

Fisher & Paykel Appliances, the whiteware manufacturer, fell 1.8% to 55 cents.

Heartland New Zealand Ltd. fell 1.7% to 57 cents, with the possible downgrade of its credit rating by Standard & Poor's taking some of the shine off the announcement that PGG Wrightson Ltd.'s bond and debenture holders has approved the sale of its finance unit to the would-be bank.

The credit ratings agency placed Heartland's BBB- rating on negative outlook last week over its earnings outlook and legacy loans. The finance company needs to maintain its investment grade rating in order to obtain its banking license.

Wrightson shares were unchanged at 46 cents.

Steel & Tube Holdings, the construction materials supplier, fell 1.6% to $2.51.

New Zealand Refining Co., which operates the country's only onshore oil refinery, fell 1.5% to $3.20.

(BusinessDesk)

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