MARKET CLOSE: NZ stocks rise; Fletcher paces advance

MARKET CLOSE: NZ stocks rise on buy-out activity; Fletcher paces gainers, Wrightson falls

By Jason Krupp

Feb. 7 (BusinessDesk) - New Zealand stocks rose to their highest level in almost three years, with the market bolstered by positive sentiment on offshore markets and heightening acquisition activity locally. Fletcher Building Ltd. paced gainers and PGG Wrightson Ltd. fell.

The NZX 50 Index rose 19.59 points, or 0.6%, to 3387.41. Within the index, 30 stocks gained, nine fell, and 11 were unchanged. Turnover was $123.2 million.

Improved unemployment and manufacturing numbers in the U.S. saw increased appetite for higher yielding, or riskier, with the Standard & Poor's 500 Index closing on a 9-week high, up 0.3% to 1310.87 on Friday.

Fletcher, New Zealand's biggest construction company which is currently bidding for Australia's Crane Group, rose 2.4% to $8.23, its highest level in 11 weeks. Fletcher has offered A$10.07 per Crane share, consisting of one Fletcher share, A$3.50 in cash, and an A$0.50 per share fully franked special dividend.

Fletcher rose "mainly in reaction to the positive conclusion to the Crane bid and their directors agreeing to the price that they are going to pay," said Grant Williamson, a director at Hamilton Hindin Greene.

Auckland International Airport Ltd., the country's busiest gateway, rose 0.9% to $2.26 after it reported a 6.1% increase in international traffic in December, mainly driven by an uptick in short haul traffic and a jump in visitors from China.

Queenstown Airport, in which AIA owns a 25% stake, saw international traffic volumes jump by 90%, as Jetstar commenced international services to Melbourne and the Gold Coast.

Comvita Ltd. was unchanged at $1.52 after the medical honey products developer said it will appeal a U.K. court decision which dismissed its patent infringement case against Brightwake and declared its wounds treatment patent invalid.

The court also ordered Comvita to pay 400,000 British pounds (NZ$835,000) in costs. The appeal is likely to add as much as 100,000 pounds to its existing legal bills, which the company said it will realise in this financial year.

Separately, Comvita announced that its global licensee, Derma Sciences, had reported positive results of a phase II clinical trial for its new wound healing drug, DSC127, which has been shown to be three times more likely to result in healing of diabetic foot ulcers than conventional treatments.

Wrightson, the rural services company facing a partial takeover offer from Singapore's Agria Corp., fell 4.8% to 59 cents, leading decliners on the NZX 50.

An independent report commissioned by Wrightson's directors, today recommended that shareholders accept the 60 cents-a-share offer, which would give the Agria a 50.01% stake in the company.

Wrightson also reported a first-half net loss of $5.9 million today even as revenue climbed 11% to $646 million. It retained its full-year forecast for operating earnings before interest, tax, depreciation and amortisation of $58 million to $61 million.

"The financial results were a bit disappointing considering the resurgence in commodity prices," Williamson said.

Telecom Corp., New Zealand's biggest phone company, fell 1.3% to $2.21.
The government today confirmed that it had started commercial negotiations with the company and joint venture partner Vodafone to provide ultra-fast broadband services to rural New Zealand, which Williamson said hadn't "created an interest in the stock " today.

Cavalier Corp., the country's only listed carpet maker, fell 2.5% to $3.12.

Last week, New Zealand Wool Services International Ltd.’s said the carpet maker had sought its support for a Commerce Commission application to buy WSI’s scouring assets. Shares in WSI, the wool exporter, rose 6.4% to 50 cents.

New Zealand investors will get a new mineral resources play to invest in on Feb. 15, with the anticipated listing of Broken Hill Prospecting Ltd. following a successful A$4.5 million capital-raising.

Dual-listed New Zealand gold producer Heritage Gold Ltd. held 29% of BHPL prior to the initial public offering and will retain a 21.7% holding upon listing on both the NZX and ASX next week. Heritage Gold shares were unchanged at 2.5 cents on the NZX, and have gained 8.7% this year.

(BusinessDesk)

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