MARKET CLOSE: NZ stocks join equity rally on QE3 talk; Goodman Fielder leads gainers, Heartland falls
By Jason Krupp
Aug. 24 (BusinessDesk) - New Zealand stocks rose, with the bourse riding a wave of upbeat sentiment on hope that a weaker string of U.S. economic data will spur the Federal Reserve to launch a third round of quantitative easing. Goodman Fielder Ltd. led gainers, and Heartland New Zealand Ltd. fell.
The NZX 50 Index rose 17.93 points, or 0.5%, to 3,287.52. Within the index, 24 stocks rose, 16 fell, and 10 were unchanged. Turnover was $98.5 million.
"We're predominantly up as a result of the flow-on effect from the very large gains in the Dow, even though the gains were paradoxical," said John Elsom, an adviser at Craigs Investment Partners. "We're also seeing the market reward companies whose results are beating expectations."
Goodman Fielder, the Australian food ingredient manufacturer, rose 5.4% to 98 cents with the stock regaining some of the ground it lost after telling investors last week that annual profit would miss its $140 million target. The stock is rated a 'hold' based on the consensus view of 12 analysts polled by Reuters.
Nuplex Industries Ltd., the industrial chemicals and resins manufacturer, rose 4% to $2.59, with the stock continuing to ride the bow wave from its earnings, with full-year net profit up 3.6% to $66.5 million, beating its own guidance.
Auckland International Airport Ltd., the country's busiest gateway, rose 2.3% to $2.27. The airport yesterday reported a 15% gain in full year underlying profit to $120.9 million, driven by a jump in earnings from retailing at its new departures area and increased airfield income.
New Zealand Oil & Gas Ltd., the energy exploration and production company, was unchanged at 62 cents after it said it's pressing ahead with plans to drill exploration wells offshore Taranaki, despite taking charges of $98.8 million for its investment in the failed Pike River Coal mine and reporting a net loss for the year to June 30 of $75.9 million.
The result is an improvement on the half-year reported loss of $99 million, and reflects profitable post-tax trading of $23.1 million in the second half of the year.
Pacific Brands Ltd., the Australian clothing maker, was unchanged at 80 cents after it reported a full-year loss of A$131.5 million, with its cost savings initiative unable to reverse losses from weaker sales and one-time charges.
The net loss for the 12 months ended June 30 compares to a profit of A$53.2 million in the previous year, mainly reflecting impairment charges of A$235.3 million on non-cash write-downs, one-off transformational costs and divestments.
Heartland, the financial services company trying to transform itself into a bank, fell 5.4% to 53 cents, leading decliners on the exchange. The stock has come under pressure recently after Standard & Poor's put the lender's BBB- credit rating on negative outlook.
Tower Ltd., the general insurer controlled by Guinness Peat Group, fell 3.4% to $1.42.
Telstra Corp., the Australian phone company, fell 3.3% to $3.87 after shedding its 14 Australia cents a share dividend today. Highlighting that the stock had declined by less than its payment, Elsom said the dividend underpinned the "attractiveness of Telstra".
Freightways Ltd., the express package company, fell 2.5% to $3.12.
Pumpkin Patch Ltd., the children's clothing chain, fell 2.1% to 95 cents.