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MARKET CLOSE: NZ shares rise as GPG talks up Tower’s value

MARKET CLOSE: NZ shares rise as GPG talks up Tower’s value, Port of Tauranga falls

By Hannah Lynch

Aug 29 (BusinessDesk) - New Zealand shares rose, led by Tower after Guinness Peat Group said the insurer’s stock doesn’t reflect the value of its businesses. Port of Tauranga fell from an all-time high after confirming another record full-year profit.

The NZX 50 Index fell 0.66 points, or 0.01 percent, to 3628.38. Within the index, 24 shares rose, 19 fell and seven were unchanged. Turnover was about $129 million.

Tower, the insurance company hat’s about one third owned by GPG, rose 3.4 percent to $1.85 after GPG chairman Rob Campbell said the value of Tower’s component parts “is not being fully reflected.” GPG has encouraged Tower to review its strategies and wants the company to rejig its structure to optimise shareholder value.

"GPG obviously sees greater value in Tower than the current share price," said Matthew Goodson, portfolio manager at BT Funds Management.

Shares in GPG fell about 1 percent to 51 cents after the investment firm posted a first-half loss that reflected a European Court-imposed 110 million pound fine on its threadmaking business, Coats.

Shares in Delegat’s Group rose 3.1 percent to $3.04, matching the record set earlier this month, after the winemaker beat its full-year guidance and forecast sales growth to continue in 2013.

Operating profit was $25.6 million in the 12 months ended June 30, up from $23.9 million a year earlier and beating the winemaker’s December guidance.

Shares in Air New Zealand were unchanged at 89.5 cents. The airline releases full-year earnings tomorrow and Forsyth Barr analyst Robert Mercer is forecasting a 3.5 percent increase in sales and a 22.1 rise in reported profit. The stock has gained about 1.7 percent this year.

PGG Wrightson, New Zealand's biggest rural technology and services provider, rose 2.9 percent to 36 cents.

Port of Tauranga fell 2.5 percent to $11.95, having been bid up to a record ahead of its results. New Zealand's busiest port posted a 26 percent gain in full-year profit to a record $73.5 million and predicted more earnings growth in 2013 on rising volumes of freight.

"It had a tremendous run going into the result," Goodson said. "It met expectations - it needed to beat them to surge higher."

"It did benefit from the strike at Auckland but they have given guidance for further growth," he said.

Auckland International Airport, which is targeting Asian arrivals to stoke growth over the next decade, fell 0.4 percent to $2.61 ahead of its result tomorrow. The market consensus is for sales of $426.1 million and reported profit of $138.3 million.

"The key will be the recent traffic volumes and a view on their continuation," Goodson said. "The share price has had some strong moves - there are some solid expectations built into it."

Mercer Group was unchanged on 13 cents. The stainless steel fabricator narrowed its full-year loss on an increase in its stainless division and is forecasting a return to profit in 2013. The loss was $1 million in the 12 months ended June 30, down from a loss of $9.4 million a year earlier. The stock has gained about 120 percent this year.

Shares in Wellington Drive Technologies, which makes energy-efficient motors, were unchanged on 14. It narrowed its first-half loss and said achieving a profit in 2013, its first since listing in 2001, will be “challenging” given the weak outlook for Europe

Renaissance, which used to have a monopoly on New Zealand sales of Apple products, was also unchanged on 12 cents after announcing it will take legal action against Exeed over unresolved details of the sale of its IT distribution division. The stock has about 26 percent this year.


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