CLOSE: NZX 50 rounds 7th day of gains; FPA, Sky City rise

Wednesday 22nd July 2009

New Zealand’s benchmark NZX 50 Index extended its advance for a seventh day, as investors took encouragement from U.S. earnings that weren’t as bad as expected, Sky City Entertainment Group continued its rally and Fisher & Paykel Appliances rose to a 7-week high.

The NZX 50 rose 27.25, or 0.9%, to 2900.44, the highest level since late October. So far this month, the market value of the NZX 50 has grown by $1.6 billion. Within the index, 32 stocks rose, eight fell and nine were unchanged. Turnover was $93.3 million.

“Most people have wanted to feel positive for some time after a lengthy period of being glum,” said Rickey Ward, who helps manage $400 million at Tyndall Investment Management. “Earnings numbers, albeit still bleak, are better than expected.”

Sky City (NZX: SKC ) rose 3.6% to $3.16, its fourth daily gain, to the highest since Oct. 23. The casino and hotel operator this week said net profit for the year ended June 30 was $113 million to $116 million, about 9% higher than its forecast in April. The results reflect better-than-expected fourth quarter revenues across its core casino operations.

“This is yet another step to illustrating this is a different company than it was in yesteryear,” Ward said. It still “needs to demonstrate that it can grow earnings.”

F&P Appliances (NZX: FPA ) gained 7% to 75 cents. The appliance maker that brought in China’s Haier Group as a cornerstone shareholder and sold shares at a discount to restore its balance sheet this year is rated ‘outperform’ based on the average of six recommendations collated by Reuters.

Children’s clothing chain Pumpkin Patch (NZX: PPL ) gained 4.5% to $1.62 amid optimism fiscal stimulus in Australia, amounting to more than A$20 billion in cash handouts, will fuel consumer spending. Woolworths Ltd., Australia’s biggest retailer, today posted a 5.4% gain in fourth-quarter sales.

Jewellery chain Michael Hill International (NZX: MHI ) rose 1.5% to 67 cents. Warehouse Group (NZX: WHS ), the biggest New Zealand retailer, rose 2.2% to $3.73.

OceanaGold Corp (NZX: OGC ), operator of the Macraes gold mine near Dunedin, fell 4.8% to $1.38 after it raised A$24.2 million selling ASX-listed chess depositary receipts at an 11% discount of A$1 apiece to fund ongoing exploration and strengthen its balance sheet. The company’s shares have surged some 292% on the NZX in the past six months as it prepares to set a record year in gold production.

Livestock Improvement Corp (NZX: LIC ), the dairy herd breeding cooperative owned by farmers, rose 10% to $1.76 after posted a record annual profit, reflecting the peak of the dairy season in spring 2008. It plans to cut costs and has frozen salaries in preparation for leaner times ahead.

Pike River Coal (NZX: PRC ) fell 1.8% to $1.12 after yesterday announcing a delayed schedule date for the first 60,000-tonne export shipment to Japan by about six weeks to mid November. First NZ Capital analyst Jason Familton said the delays will put its debt covenant under pressure, the NBR reported. Pike yesterday said it is on track to meet the Liberty Harbor convertible bond condition that “first steady state” production is achieved by Nov. 30.

Fisher & Paykel Healthcare (NZX: FPH ) edged up 0.3% to $3.07 after Goldman Sachs JBWere said the swine flu pandemic may stoke demand for its breathing devices and respirators.

Businesswire.co.nz

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