MARKET CLOSE: NZ stocks rise on quake, China

MARKET CLOSE: NZ stocks rise on quake demand, Australian outlook; Rakon leads

By Jason Krupp

Sept. 14 (BusinessDesk) – New Zealand stocks rose for a third session, with Fletcher Building Ltd. reaching a five-month high on expected demand after Canterbury’s quake and as upbeat economic data from China helped stoke investors appetite for equities. Rakon Ltd. led gainers.

The NZX 50 rose 19 points, or 0.6%, to 3,197.5. Within the index 30 stocks rose, 10 fell and 10 were unchanged. Turnover on the day was $88.1 million.

China released data in the past week showing a surge in industrial production last month, while retail sales and lending topped economist estimates. That bodes well for demand for New Zealand goods in the nation’s No. 2 export market and helps underpin demand in Australia, the biggest export market. Australia’s S&P/ASX 200 Index rose 0.5%.

“Sectors positively exposed to the earthquake continued to rally today, but otherwise the general tone is positive on offshore markets,” said Paul Robertshawe, who helps manage $220 million in equities for Tower Asset Management. “The markets are very fickle on macro data, which happens to be good now, but our base view is that there isn’t going to be a double dip recession.”

Fletcher Building, the nation’s biggest construction company, rose 1.4% to $8.48, the highest close since April 21. Steel & Tube Holdings, which produces materials for the construction industry, rose 1.6% to $2.57, a four-month high.

Both companies are expected to benefit from the reconstruction efforts in the wake of the Canterbury earthquake, with the repair bill expected to be in the region of $4 billion.

Rakon, the maker of crystal oscillators used in cellphones and GPS units, rose 5.2% to $1.20, NZX Ltd., the securities market operator, rose 4% to $1.55, and Cavalier Corp., New Zealand’s only listed carpet maker, rose 4% to $2.85.

Pike River Coal Ltd., the coal miner, rose 2.8% to $1.09 after the company announced that mine manager Peter Whittall would replace long-serving chief executive Gordon Ward after his sudden resignation.

Ward led the company from its concept design phase 14 years ago and into its second export shipment his month.

NZ Oil & Gas Ltd., the energy exploration and production company, rose 2.3% to $1.31 after the price of crude oil reached a one-month high on optimism about economic growth in China. West Texas Intermediate traded recently at US$77.16 a barrel, from below US$72 at the start of the month.

Mainfreight Ltd., the integrated logistics company, rose 3.4% to $7.24.
Ecoya Ltd., the scented candle company, was unchanged at 80 cents after the company completed its placement of 6.3 million shares, worth $4.75 million, to partially fund its acquisition of cosmetics company Trilogy Natural Products Ltd.

The shares were sold at 75 cents each, or a 6.3% discount to today’s closing price, to major shareholder the Business Bakery L.P., interest associated with directors Rob Fyfe and Rich Frank, and a number of institutions and high net worth investors.

The Business Bakery - which is co-owned by Ecoya’s executive chairman Geoff Ross, executive director Grant Baker and CFO Stephen Sinclair - participated in the capital raising, keeping its shareholding little changed at about 35%.

Goodman Property Trust, the listed property investor, fell 2% to 96 cents, pacing decliners on the NZX 50.

Goodman Fielder Ltd., the food ingredient manufacturer, fell 1.6% to $1.81, and AMP Office Trust, the investor in prime office space, fell 1.3% to 74 cents.

Michael Hill International Ltd., the jewellery manufacturer and retailer, fell 1.5% to 68 cents after the company said its founding family has abandoned plans to lift its stake in the jeweler to 50.1% from 48% after the Takeovers Panel indicated it wouldn’t grant an exemption to takeover rules.

Warehouse Group, the biggest listed retailer, fell 0.5% to $3.73 after data from Statistics New Zealand showed that retail sales in July dropped as people spent less on recreational goods.

The seasonally adjusted value of core retail spending, which excludes spending on motor vehicle-related goods, fell 0.1% in July, according to Statistics New Zealand, short of the 0.2% expansion forecast in a Reuters survey.

Shares in Orion Minerals Group, the NZAX-listed company formed from a shell to invest in mining in South America, were unchanged after the company posted a wider full-year loss after ceding its interest in a Chilean iron ore prospect.

The net loss was US$2.4 million, or 28 cents a share, from a loss of US$1.4 million, or 16 cents a year earlier. With zero revenue and payments to suppliers and workers of about $2 million, the company is relying on its $7.8 million of cash reserves.

(BusinessDesk)

© Scoop Media