NZ stocks gain, Fletcher, Steel & Tube rise
MARKET CLOSE: NZ stocks gain, Fletcher, Steel & Tube rise
By Jonathan Underhill
Dec. 11 – New Zealand stocks rose, having see-sawed between gains and falls the past four days. Fletcher Building and Steel & Tube Holdings advanced amid speculation they stand to gain from any increase in government infrastructure spending.
The NZX 50 Index gained 15.162, or 0.6%, to 2726.711. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Fletcher rose 3.2% to NZ$5.83, its highest close in more than a month. Steel & Tube, which sells steel building products such as reinforcing, gained 1.8% to NZ$2.80. Infrastructure Minister Bill English last week said the government's December stimulus package will inject about NZ$7 billion into the domestic economy over the next two years.
“Industries exposed to infrastructure spending (are) particularly well placed,” said Stephen Toplis, head of research at Bank of New Zealand. Overall economic growth will be 0.6% in 2009, speeding to 3.6% in 2010, he said.
ING Property Trust rose 3.1% to 67 cents and is up almost 7% in the past month, while the NZX 50 fell 3%. The trust has sold nine properties this year, for a total of NZ$74.2 million, or 92% of their book values as at March, it said today.
NZX Ltd., operator of the New Zealand stock exchange, rose 0.6% to NZ$5.50 after the Board of Bond Exchange of South Africa recommended shareholders accept the Johannesburg Stock Exchange offer of 125 rand per share. NZX is the biggest shareholder in BESA, having acquired its 22% stake on Oct. 3 for 73.17 rand, amounting to a 71% profit in just two months.
Cavalier Corp., the only carpet maker on the benchmark index, rose 8.7% to NZ$2, though only 2,278 shares changed hands, suggesting low liquidity is forcing investors to bridge wide gaps between buy and sell orders to trade the stock.
Telecom Corp. rose 0.8% to NZ$2.40 after Bill Barney, chief executive of undersea cable operator Pacnet, said his company is interested in buying Telecom's underperforming Australian subsidiary AAPT, saying it would fit well with the company's strategy. Telecom stock has fallen more than 45% in the past 12 months.
New Zealand Oil & Gas rose 0.8% to NZ$1.25 after the price of oil gained after the U.S. House of Representatives approved a $14 billion rescue package for automakers, which may help underpin demand for fuel. Crude oil for January delivery rose 1.7% to US$44.24 a barrel.