MARKET CLOSE: NZ stocks gain led by AMP

MARKET CLOSE: NZ stocks rise as Japanese equities pare losses; AMP leads gains, Skellerup falls

By Jason Krupp

March 16 (BusinessDesk) - New Zealand stocks rose, after the Japanese market pared its losses amid speculation that the post-disaster selloff may have been excessive even as the country battles to prevent a nuclear meltdown. AMP Ltd. led gainers, and SkyCity Entertainment Group fell.

The NZX 50 Index rose 12.66 points, or 0.4%, to 3,326.8. Within the index, 29 stocks rose, 14 fell, and seven were unchanged. Turnover was $163.6 million.

Japan's Nikkei 225 Index rose 3.6% to 8,917.54 in afternoon trade, clawing back some of the ground it lost yesterday when the benchmark plunged almost 11% as rising risk aversion saw investors sell riskier stocks in favour so-called safe haven assets.

"They've had two days of large declines and it is only natural for people to re-look at markets once they've had a fall," said Rickey Ward, domestic equities manager for Tyndall Investment Management. "Whether they can sustain that is anybody's guess."

AMP, the Australian wealth manager, rose 5.2% to $7.15. The company earlier this month successfully cleared its last regulatory hurdle, allowing it to merge its business with Axa Asia Pacific Holdings' New Zealand and Australian operations.

Tower Ltd., the general insurer, rose 4.7% to $1.79 with the stock bouncing back after being heavily sold after it said expenses will swell to between $15 million and $20 million due to reinsurance and other costs related to the Christchurch earthquake.

Air New Zealand Ltd., the national carrier, rose 1.9% to $1.08. The shares plummeted 10.9% yesterday after the airline said it would not turn a profit in the second half of the year, and full-year profit was likely to fall short of $100 million. The company blamed the decline on rising fuel costs, damages from the Christchurch earthquake and falling demand in the wake of the Japanese disaster.

"The profit warning illustrates that it is a company that doesn't have a lot of control of things," Ward said.

Telecom Corp., New Zealand biggest phone company, rose 0.8% to $1.99 ahead of a reweighting of the Australian stock exchange this Friday. Under the new ranking rules, Telecom will be removed from the S&P/ASX 100, which has driven much of the trading in its shares recently as fund managers rebalance their portfolios.

Fletcher Building Ltd., the country's biggest construction firm, is being moved up the ranks and included on the S&P ASX 200. The shares were unchanged at $8.66.

PGG Wrightson rose 2% to 51 cents after independent directors at the rural services company said they could not recommend a partial takeover offer from
Zuellig Group, following an update from the investment company on its intentions failed to provide any price information.

The Hong Kong-based company had previously said it was looking to acquire a 19.9% stake in PGW, a move directors said was primarily aimed at frustrating Agria Corp's bid for the company. Agria, along with China's New Hope Group, is looking to gain a controlling stake in PGW for $141 million.

SkyCity, the casino and hotel operator, fell 3% to $3.28 after the stock went ex-dividend. Any new investors who bought the stock today will not be entitled to the 8 cents-per-share payment, which is due on April 1.

A number of other companies also went ex-dividend today, including Skellerup Holdings, the rubber goods and milking equipment manufacturer, which fell 2.3% to $1.25, and Nuplex Industries Ltd., the chemical and resin maker, which fell 1.9% to $3.06.

Auckland International Airport, New Zealand's busiest gateway, fell 2.3% to $2.12, having also listed today as its dividend cut off date. Separately, the airport announced that chief operating officer Tony Gollin had handed in his resignation, and will leave the company as of April 8.

Westpac Banking Corp, the Australian lender, fell 1.1% to $30.40 on the NZX after its local unit yesterday reported it is likely to face credit losses of between $30 million and $100 million due to the latest Christchurch earthquake.

Westpac New Zealand said the exact financial impact was difficult to quantify accurately, which may result in further revisions later. That isn’t expected to impact on the bank’s Tier 1 capital position, with provisioning likely to be absorbed by Westpac’s operating profit.

(BusinessDesk)

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