MARKET CLOSE: New Zealand stocks rise; Port of Tauranga paces gainers, Wrightson falls
By Jason Krupp
Aug. 29 (BusinessDesk) - New Zealand stocks rose, with Port of Tauranga Ltd. pacing gainers on its forecast for container volumes to increase by quarter after the world's second-biggest shipping line add the post to its list of international destinations. PGG Wrightson Ltd. fell after it posted a full-year loss.
The NZX 50 Index rose 10.36 points, or 0.3%%, to 3306, its highest level since Aug. 4. Within the index, 26 stocks rose, 17 fell, and seven were unchanged. Turnover was a lower-than-usual $80.5 million.
"Investors have been quite selective in what they are buying," said Grant Williamson, a director at Hamilton Hindin Greene. "The stocks they feel have done well and will continue to do so are attracting attention."
Port of Tauranga Ltd., the country's biggest export hub, rose 4.3% to a fresh historic high of $9.70 after it said Mediterranean Shipping Co., the world’s second-largest container line by capacity, would begin new services to the port staring in October.
The service, which will link New Zealand and Australia with North and Central America, is expected to boost the port's container volumes by 25%.
"They've got some very good management in there, and their strategies are paying off, with earnings growth well above the market average," Williamson said.
Westpac Banking Corp., the Australian lender, rose 4.3% to $26.50 on the NZX. Methven Ltd., the tapware manufacturer rose 4.3% to $1.46.
Heartland New Zealand Ltd., the would-be bank awaiting approval from the Treasury and the courts to buy Wrightson's finance unit, rose 3.7% to 56 cents.
Tower Ltd., the general insurer, rose 1.5% to $1.38 after it said annual earnings are likely to meet analyst estimates of between $22 million and $28 million in the 12 months ended Sept. 30. Separately, the company announced that chairman Tony Gibbs resigned.
NZ Farming Systems Uruguay Ltd., the South American dairy farmer, was unchanged at 66 cents after it said its annual loss widened after it spent more on feed and running its farms. It will return to profit in 2012, the company said.
The net loss was US$8.7 million in the 12 months ended June 30, from a loss of US$7.9 million a year earlier. Revenues jumped 91% to US$43 million, mainly reflecting an increase in milk sales.
Turners & Growers Ltd., the fruit grower and marketer, was unchanged at $1.71 after first-half net profit tripled to $6.9 million compared to $2.2 million a year earlier.
Shares in Postie Plus Group Ltd., the clothing chain, were unchanged at 22 cents after it said fourth-quarter sales fell 6.3% as a warm start to winter sapped sales of cold-weather garments.
Wrightson, the rural services company, led decliners on the exchange, with the stock falling 4.4% to 44 cents after it posted a net loss of $30.7 million in the 12 months ended June 30, from a profit of $23.3 million a year earlier.
The loss included $18.5 million to write down wool assets and a $9.6 million charge against its annual agreed level of supply of livestock to Silver Fern Farms.
"There are some issues surrounding long term supply contract with Silver Fern Farms, and meeting the requirements is giving the company a headache," Williamson said.
Vector Ltd., the Auckland electricity and gas distributor, fell 1.6% to $2.41. Steel & Tube Holdings, the construction materials supplier, fell 1.6% to $2.51.
Goodman Fielder Ltd., the food manufacturer, fell 1% to 98 cents after it said underlying annual net profit declined 17.3% after a significant decline in the second half, particularly in its baking and dairy divisions.
Net profit before a $300 million write-down in the value of its baking division fell to $133.3 million for the year ended June 30 compared with $161.1 million the previous year. Sales fell 3.9% to $2.56 billion.
The write-down turned the bottom line into a $166.7 million net loss. The company had reported a 2.1% rise to $93.1 million in first-half net profit.
Air New Zealand Ltd., the national carrier, fell 0.9% to $1.08, with allegations of price fixing and market collusion casting a shadow over the stock today.
The High Court late last week gave the Commerce Commission leave to pursue its air cargo cartel case against a group of airlines and freight forwarders including Air NZ, after agreeing there was a local market for the services. Air New Zealand contends that inbound air cargo doesn't come under New Zealand jurisdiction.