MARKET CLOSE: NZ shares rise, led by Telstra, TEL

MARKET CLOSE: NZ shares rise, led by Telstra, Telecom

By Jason Krupp

June 21 (BusinessWire) – New Zealand shares rose, with the benchmark NZX 50 Index breaking the 3,060 point mark for only the second time since May 31, as Telstra Corp. advanced on news it has signed a non-binding agreement to participate in the rollout of Australian’s National Broadband network.

The NZX 50 rose 20.74 or 0.6 percent to 3068.24. Within the index 22 stocks rose, 13 fell, and 15 were unchanged. Turnover was $68.7 million.

Telstra, Australia’s biggest phone company, rose 9.5% to $4.16 on the NZX. The shares also gained 4.3% to A$3.70 on the ASX after the weekend announcement that the company signed an accord with the Rudd administration that would see the company migrate its voice and data traffic onto the new government-backed network.

The news also had a positive spin for Telecom, the local telecommunication company and heavy-weight on the NZX 50, which rose 2.7% to $1.94.

“You have to wonder whether the market is trying to draw parallels to Telecom to see if it is able to negotiate a similar deal to Telstra, which would have the potential for some upside,” said Craig Brown, senior investment analyst for ING New Zealand. “But you have to remember that Telstra have been working with government on their fibre business for a long time, and they have probably progressed a lot farther down that line than Telecom has here. That’s not to say that can’t do it, but there are a lot of variables.”

Westpac Banking Corp. rose 1.7% up $29.38 and Australia & New Zealand Banking Group rose 1.7% to $29.38.

PGG Wrightson Ltd., New Zealand’s biggest rural services company, was 1.9% up at 54 cents. Fisher and Paykel Apppliances Holdings Ltd., the appliance manufacturer, rose 1.7% to 59 cents.

Guinness Peat Group, the investment holding company, fell 0.8% to $3.60, while Tower Ltd. fell 2.6% to $1.89.

AMP Ltd., Australia’s largest provider of pension plans, rose 0.3% to $6.98 after gaining Commerce Commission approval to acquire the Australasian assets of Axa Asia Pacific Holdings Ltd. AMP is in pole position to bid for Axa after rival suitor National Australia Bank was knocked back in its superior A$13.29 billion proposal by Australia’s regulator.

OceanaGold Corp., the operator of the Macraes gold field, rose 1.5% to a new record high close of $4.76 after the price of gold pushed up to a new record. The shares have soared 244% in the past 12 months.

Sealegs Corp, an amphibious boat maker, today announced that that it would take a $6.2 million capital injection from private equity group Avenport Investment Corp in exchange for 20% in the company. This will bring Avenport’s stake in the company to 39.9%. Sealegs stock was unchanged at 23 cents.

“This deal looks to be very stock specific, but it quite a small transaction and I don’t think it is a signal that private equity groups are more active than they have been recently," Brown said.

(BusinessWire)

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