MARKET CLOSE: Freightways leads stocks higher, MHI bid stays

MARKET CLOSE: NZ stocks rise led by Freightways, MHI bid unchanged despite report

by Jason Krupp

Feb. 14 (BusinessDesk) - New Zealand stocks rose for their second session, with Freightways Ltd. pacing gainers after posting earnings growth amid signs that the local economy was clawing its way into recovery. Sky Network Television Ltd. fell.

Michael Hill International Ltd., the listed jeweller, fell 1.1% to 89 cents after the Hill family’s Durante Holdings vehicle said won’t be boosting its 90 cents a share offer to shareholders to take a majority stake in the company.

That comes after an independent advisers’ report said investors would be better served selling their stock through the sharemarket. The report valued the shares at between 98 cents and $1.15 apiece. Durante has some 78% of the shares it needs to reach its 50.01% target.

The NZX 50 Index rose 16.02 points, or 0.47%, to 3,383.47. Within the index, 23 stocks rose, 13 fell and 14 were unchanged.

Turnover was $72.1 million.Freightways, the express package company, rose 2.2% to $3.27 after it reported a 9% gain in first-half profit, driven by accelerating growth in its core express package and business mail division.

Net profit rose to $15.8 million in the six months ended Dec. 31, from $14.5 million, the company said in a statement today. Sales and profit exceeded expectations from broker Forsyth Barr, which had forecast $170 million and $15.4 million respectively. It gave no specific guidance for the full year, saying it is too soon to say whether the growth is sustainable.

"Freightways is quite a good barometer of what is happening in the local economy," said Grant Williamson, a director at Hamilton Hindin Greene. "It was a solid result with single digit earnings, but that is considered very acceptable in the current economic environment."

Dual-listed banks were among the top performers on the NZX today, taking their lead from a stronger opening on Australian markets, with the S&P/ASX 200 last trading 1.1% up at 4,936.

Australia and New Zealand Banking Group, the country's biggest lender, rose 3.3% to $33.91, and Westpac Banking Corp., the Australian lender, rose 1.9% to $32.29.

Telecom Corp., the country's biggest phone company, rose 2.3% to $2.21, regaining some of the value it lost last week when it reported a 32% slide in first-half profit as earnings shrank in its fixed, mobile and data businesses.

The Auckland-based company reported a net profit of $165 million in the six months ended Dec. 31, compared to $243 million a year earlier, coming in slightly short of brokers’ expectations.

Investors largely ignored softer retail trade numbers for December, in which total retail sales fell 1.1% and core sales dropped 1.2% compared to the previous month. Williamson said this was mainly due to the retail survey being a backward looking indicator, with investors more focused on electronic card transactions as a gauge of the retail environment.

Kathmandu Holdings, the outdoor clothing retail, rose 2.4% to $2.16; Pumpkin Patch Ltd., the children's clothing retailer, rose 1.4% to $1.47; and Warehouse Group, the country's biggest listed retailer, rose 0.6% to $3.55.

Infratil Ltd., the infrastructure investment group, rose 1% to$1.94 after subsidiary Infratil Energy Australia said it was buying a site for a gas fired power plant south of Sydney as part of the New South Wales energy privatisation process.

IEA is paying A$9 million (NZ$11.9 million) for the Bamarang generation development site.

Sky Network, the pay TV operator, fell 1.8% to $5.35, leading decliners on the bourse ahead of the release of its interim results which are due on Friday.Guinness Peat Group, the investment holding company, fell 1.3% to 76 cents, with shares paring some of their gains after reaching a nine-month high last week when the company said it would gradually sell down most its assets and return the proceeds to investors.

Pharmacybrands Ltd., which manages the Unichem, Amcal, Life Pharmacy and Care Chemist stores, fell 2.2% to 44 cents after announcing that it had agreed to buy Radius Pharmacy for $17.1 million and take on $18 million of debt, adding interests in 34 chemist outlets to its network.

(BusinessDesk) 17:56:06

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