NZX CLOSE: NZ stocks rise, led by Westpac, Australian lenders

Tuesday 29th September 2009

New Zealand stocks rose for a second day, keeping the NZX 50 Index near an 11-month high, as reports of U.S. mergers helped buoy sentiment and lift Australian financials such as Westpac Banking Corp.

The NZX 50 rose 24.21, or 0.8%, to 3155.39. Within the index, 25 stocks rose, 14 fell and 11 were unchanged. Turnover was $81.5 million.

Westpac jumped 5.2% to $32.50, Australia & New Zealand Banking Group rose 5% to $30.20 and AMP gained 4.8% to $7.65. The rally in financials mirrors their gains in Sydney that lifted the S&P/ASX 200 by 1.7%.

Shares gained across Asia, following advances in the U.S. and Europe, after Xerox Corp. agreed to buy Affiliated Computer Services for US$6.4 billion and Johnson & Johnson acquired 18% of Dutch biotech company Crucell for $444 million. Abbott Laboratories said it would acquire the drugs unit of partner Solvay for 4.5 billion euros.

Fletcher Building Ltd., the nation’s biggest construction company, rose 1.9% to $8.45 after government figures showed the second monthly increase in building consents.Building consents rose 1.7% in August, adding to a 4.5% increase in July, according to Statistics New Zealand.

“Low interest rates, an increase in net migration and the recent pick up in house prices are factors which should underpin residential construction activity going forward,” said Jane Turner, economist at ASB.

Telecom Corp., the second-largest company on the NZX 50, slipped 0.8% to $2.63 after Communications Minister Steven Joyce said the government will overhaul the Telecommunications Service Obligation levy, which requires Telecom’s rivals to pay about $70 million a year in compensation for providing basic phone services to non-commercial customers in rural areas. The funds will instead be channeled to rural broadband, Joyce said.

Pike River Coal rose 2% to $1.01 after the mining company yesterday pointed to analyst predictions that the price of hard coking coal will reach US$200 a tonne next year, which is likely to drive up contract prices. US dollar-based contract prices are set once a year in talks between Australian producers and customers in Japan.

Pyne Gould Corp. tumbled 29% to a record low 50 cents, trimming the investment and finance group’s market value to $69 million. The stock has shed 65% of its value in the past three months. The company is raising as much as $270 million selling shares at 40 cents apiece, seeking to restore a balance sheet eroded by write-downs on property loans.

NZ Farming Systems Uruguay sank 4.4% to 44 cents, the biggest decline on the NZX 50. Rakon Ltd., the manufacturer of components for navigation systems, declined 2.4% to $1.22.

Businesswire.co.nz

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