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MARKET CLOSE: Stocks mixed; Steel & Tube advances

Published: Wed 10 Dec 2008 08:43 AM
MARKET CLOSE: NZ stocks mixed; Steel & Tube advances
By Jonathan Underhill of Content.net
Dec. 9 – New Zealand stocks were mixed, with the NZX 50 Index climbing for the first day in three, led by Steel & Tube Holdings and Fletcher building on optimism about government infrastructure spending.
The NZX 50 gained 24.901, or 0.9%, to 2724.711. Within the index, 23 stocks fell, 20 rose and seven were unchanged. Local shares rose following a rally on Wall Street, which was driven by President-elect Barack Obama’s plan for the largest spend-up on public works since the 1950s. The proposal helped drive up prices of commodities including oil and copper.
“Psychologically it helps,” Alan Moore, who helps manage about NZ$250 million at Milford Asset Management, said of Obama’s plan. “There’s a huge amount required for the infrastructure spend but it is going to take a while to actually gain momentum.”
Australia’s S/ASX 200 Index fell 0.6% to 3608.2 in late afternoon trading. Newcrest Mining surged 8.8%, leading a rally in resources stocks. Financial including Commonwealth Bank fell. Japan’s Nikkei 225 Index rose 0.8% to 8391.18 in mid-day trading.
In New Zealand, Prime Minister John Key used his first speech from the throne to reiterate his government’s plans for ongoing tax cuts, more spending on infrastructure and a whittled down bureaucracy in its first term.
Companies that typically benefit from major building projects led gainers today. Fletcher Building, the nation’s largest construction company, rose 4.5% to NZ$5.62. Steel & Tube Holdings, which supplies building products such as steel reinforcing, gained 4.8% to NZ$2.83.
Pike River Coal rose 4.4% to 96 cents and New Zealand Oil & Gas climbed 4.1% to NZ$1.27 as prices of crude oil and other commodities rose.
Crude oil rose a second day, trading near US$44 a barrel on speculation government and central bank efforts worldwide to revive growth will stoke demand for fuel.
Restaurant Brands New Zealand, which holds the local franchise for KFC, Pizza Hut and Starbucks coffee outlets, rose 3.4% to 61 cents after the company posted a 0.8% gain in third-quarter sales. KFC drove sales growth, with revenue from the chicken outlets gaining NZ$2.3 million to NZ$47.9 million.
Goodman Property Trust fell 1.9% to NZ$1.04 after announcing it had sold the APN News and Media building in Manukau for NZ$15.6 million and will use the proceeds to strengthen its balance sheet.
Moore said companies likely to be able to maintain their dividend payments, including Fletcher, Telecom and Sky City may represent reasonable value.
Telecom rose 1 cent to NZ$2.33 and has declined 46% in the past year. Sky City fell 0.7% to NZ$2.94, to be down 36% in the past 12 months.
“In a year’s time we may be saying it was a great buying opportunity,” he said. “With interest rates coming down for depositors it is only a matter of time before people are dipping their toes in the waters” of the stock market.
“Our stock market will start to look cheap,” he said.
(Businesswire)

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