MARKET CLOSE: Stocks rise from 5-year low; Nuplex jumps

Wednesday 25th February 2009

The NZX 50 Index rose from a five-year low after U.S. stocks rallied and New Zealand Oil & Gas and Port of Tauranga posted higher earnings.

The NZX 50 snapped a seven-day slide, rising 12.292, or 0.5%, to 2499.82. Within the index, 30 stocks rose, 13 fell and seven were unchanged. Turnover was NZ$65.7 million.

Nuplex Industries, whose shares have tumbled 58% this year, led a rally in companies pounded over the past seven days. The specialty chemicals and resins maker, which is in talks with banks to ease the terms of its loan facilities jumped 17% to NZ$1.35.

Children's clothing chain Pumpkin Patch rose 8.4% to NZ$1.03, having dropped 13% this year. Carpet maker Cavalier Corp. gained 4.5% to NZ$1.40.

PGG Wrightson, which is due to post earnings tomorrow, gained 7.5% to 72 cents.

Stocks rose on Wall Street after Federal Reserve Chairman Ben Bernanke hosed down concern that the nationalization of banks was imminent and said the recession could end this year. The Dow Jones Industrial Average jumped 3.3%, with General Motors soaring 25% and Citigroup and Bank of America climbing more than 20%.

If the Obama administration is successful in restoring financial stability "there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," Bernanke said in testimony to the Senate Banking Committee.

NZ Oil & Gas rose 1.7% to NZ$1.22 after posting a 30% increase in first-half profit on a foreign-exchange gain and higher sales. "The combination of a strong balance sheet, ongoing production revenue and a diverse portfolio places NZOG in a very strong position compared to many of its peers," chief executive David Salisbury said today.

Port of Tauranga, the nation's biggest export port, rose 2.9% to NZ$5.30 after it reported a 10% gain in first-half earnings on higher freight volumes and said full-year profit would be similar to the previous year.

Foodmaker Goodman Fielder tumbled 19% to NZ$1.45 after the company posted a 22% decline in first-half earnings and said full-year earnings may weaken by about the same amount as the downturn spurs consumers to buy cheaper, unbranded processed foods.

"The continuing severe economic conditions have caused an erosion of consumer confidence and this has resulted in a drift to cheaper alternatives such as house brand products," it said.

Air New Zealand fell 2.4% to 81 cents amid reports first-half earnings may plummet as demand for fares declines with the global downturn and the airline is hit by fuel hedge losses and increased rivalry, driving ticket prices lower.

Australia's S&P/ASX 200 Index fell 0.1% to 3327.5.

(Businesswire)

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