CLOSE: Shares rise for fourth day; FPA, Cavalier lead

Friday 17th July 2009

Shares rose for a fourth day amid speculation weaker second-quarter earnings are already reflected in prices and there are more signs of life returning to the global economy. Fisher & Paykel Appliances and Cavalier Corp. led the advance.

The NZX 50 Index rose 6.7, or 0.2%, to 2808.22, the highest since June 16. Within the index, 19 stocks rose, 19 fell and 13 were unchanged. Turnover was $85 million.

F&P Appliances (NZX: FPA ) rose about 6% to 71 cents, the highest in a month. The shares of the appliance manufacturer have an average rating of ‘outperform,’ based on recommendations of six analysts compiled by Reuters.

Cavalier (NZX: CAV ), the carpet maker, rose 5.4% to $1.95. Shares rose on Wall Street after JPMorgan Chase posted better than expected earnings and Treasury Secretary Timothy Geithner said in a Bloomberg interview that there are “durable” signs that financial markets are on the mend.

“There’s more and more optimism starting to come through,” said Alan Moore, who helps manage $250 million at Milford Asset Management. “There’s a heck of a lot of cash still sitting around trying to find a home – some will go into the markets.”

Sky City Entertainment Group (NZX: SKC ) climbed 3.7% to $2.78. The hotel and casino operator is rated `outperform,’ based on the recommendation of nine analysts compiled by Reuters. Four rate it a ‘buy.’

Infratil Ltd (NZX: IFT ), which is considering the sale of its holding in Germany’s Lubeck airport, gained 1.8% to $1.74.

Fisher & Paykel Healthcare (NZX: FPH ) , which counts the U.S. as one of its biggest markets, advanced 1.7% to $2.96.

Sealegs Corp (NZX: SLG )., the manufacturer of amphibious vehicles, gained 1.6% to 12 cents after forecasting a drop in revenue this financial year and said it is cutting operating costs to adjust to tougher economic conditions. Last month, the company was rated a “speculative buy” by McDouall Stuart, with long-term growth prospects in the U.S. lifting revenue. The company was optimistic it can ramp up activity when demand returns, and said it the US Coast Guard had signed off on its amphibious boat models.

Lion Nathan (NZX: LNN ), Australia’s second-largest brewer, fell 1.5% to $14.36. The company yesterday said it will meet its profit target this year of between A$305 million and A$315 million. Major shareholder Kirin Holdings gained Overseas Investment Office approval to mop up the 54% of the company it doesn’t already own.

Mainfreight Ltd (NZX: MFT ), the trucking company, raise 0.5% to $4.10. It was raised to ‘neutral’ from ‘underperform’ by Credit Suisse, according to the NZ Herald. A decline in freight volumes is levelling off, the report said. Analyst Kar Yue Yeo forecasts a 51% drop in quarterly earnings to $4.2 million. Analysts rate the stock ‘outperform,’ based on the average of analyst recommendations compiled by Reuters.

Ryman Healthcare (NZX: RYM ) fell 2.6% to NZ$1.53, the biggest decline on the NZX 50 today.

Businesswire.co.nz

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