NZX CLOSE: NZX 50 climbs to 13-month high; Steel & Tube, Sky City gain

Tuesday 20th October 2009

New Zealand shares rose, pushing the NZX 50 Index to a 13-month high, joining a global rally on optimism the world economy is reviving from its slump, buoying demand for equities and commodities.

Steel & Tube led the advance.The NZX 50 gained 31.64, or about 1%, to 3252.56, the fifth straight daily advance. Within the index, 29 stocks rose, eight fell and 13 were unchanged. Turnover was $78.5 million.

Helping fuel stocks worldwide, Apple Inc. posted fourth-quarter sales and profit that beat estimates, adding to optimism the U.S. reporting season will show corporate earnings are growing more than expected.

The Dow Jones Industrial Average climbed about 1% yesterday and in Asia today, Japan’s Nikkei 225 Index gained about the same amount in early afternoon trading. Australia’s S&P/ASX 20 Index climbed 1.3% after the central bank said economic growth is speeding enough to warrant further rate hikes.

“The markets is looking six-to-12 months ahead and saying the outlook is extremely positive,” said Grant Williamson, a director of brokerage Hamilton Hindin Greene in Christchurch.

Williamson said he is “still a little cautious on these markets” and wants to see evidence of economic growth that would support the rally. The high kiwi dollar is also hampering the performance of companies reliant on export earnings, he said.

Steel & Tube, which supplies steel building materials such as reinforcing rods, gained 5% to $3.14. The shares have drifted down 6.6% this year.

APN News & Media, publisher of the New Zealand Herald, gained 4.8% to $2.85, tracking gains in its ASX-listed shares, which have surged 59% in the past three months. Foodmaker Goodman Fielder rose 4.6% to $2.03. Sky City Entertainment Group rose 4.1% to $3.55.

Pan Pacific Petroleum rose 1.9% to 54 cents as the price of crude oil climbed above US$80 a barrel for the first time in a year.

Underlining interest in the oil sector, Cue Resources announced it would list its shares on the NZX, having delisted the stock four years ago. It touted the benefits that may flow from the Maari field in Taranaki. Cue’s ASX-listed shares rose 6% to 26 Australian cents today and have soared 53% in the past three months.

Port of Tauranga, the nation’s largest port company by volume, rose 1.5% to $7.31.

Morningstar research unit AspectHuntley said Tauranga has done “a remarkable job” maintaining profitability in the face of a global economic slump. It commenced coverage of the company with a ‘hold’ rating, reflecting its 31% advance in the past six months, which made it “fairly priced.”

Horizon Energy Distribution rose 3.2% to $3.51 after Eastern Bay Energy Trust, which owns 77% of the utility, yesterday rejected an offer from Marlborough Line to take control of the company at $3.96 per share. The offer was at the low end of an independent valuation range of $3.96 to $4.68.

Fisher & Paykel Healthcare fell about 2% to $2.99 as the kiwi dollar strengthened, eating away the value of its U.S. dollar sales, which make up almost 80% of revenue.

The New Zealand dollar recently traded at 75.40 U.S. cents, near the highest since July 2008.

PGG Wrightson, the nation’s biggest rural services company, fell 1.3% to 77 cents a day after it was forced to defend its new cornerstone shareholder, Agria, which is facing class-action lawsuits in the U.S.

Businesswire.co.nz

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