NZX CLOSE: NZ stocks gain, led by AMP; Infratil falls

Tuesday 10th November 2009

New Zealand shares ended the session higher, led by insurers, after AMP Ltd.’s proposal to acquire and break-up AXA Asia Pacific stoked speculation for resurgent M&A activity in the sector.

The NZX 50 Index rose 2.34, or 0.1%, to 3167.40, the third daily gain. Within the index, 24 stocks gained, 16 fell and 10 were unchanged. Turnover was $271.9 million, the highest this year, swelled by trading in Auckland International Airport.

AMP jumped 9.5% to $8.10 on the NZX and Tower Ltd. climbed 4.7% to $1.78. AXA Asia Pacific yesterday rejected an unsolicited offer from AMP and AXA SA to acquire the company for cash and stock amounting to A$5.34 a share, valuing the target at A$11 billion.

The proposal “absolutely” prompted investors to reassess valuations and the potential for M&A in the insurance sector, said Paul Richardson, chief investment officer at BT Funds Management, which oversees $2.1 billion of investments.

“AMP itself might come on the block. There’s quite a sweet window of opportunity for M&A with relatively low cost of funding, if you can get it,” he said.

Infratil Ltd was the biggest decliner on the NZX 50 today, falling 4.4% to $1.53 after announcing the sale of its 3.87% stake in Auckland Airport at $87.3 million, or $1.84 apiece, a 4.7% discount on yesterday’s closing price. It originally bought the 47 million shares in 2007 for $140 million.

The investment group, which is in talks to buy Royal Dutch/Shell Group’s New Zealand assets, has better uses for the capital, said executive Tim Brown.

Auckland Airport fell 3.1% to $1.87, with 141 million shares changing hands, making it the most heavily traded stock today.

Kermadec Property Fund fell 5.6% to 51 cents after posting a 17.5% decline in first-half profit and saying New Zealand’s economic recovery will gather speed in the second half of 2010.

“Some economic uncertainty remains and on balance it seems New Zealand should expect a slow recovery, but with an improved economic trajectory in the second half of the 2010 financial year,” chairman Peter Wilson said in a statement.

Kiwi Income Property Trust fell 1% to $1.02. The second-largest property investor on the NZX, said a proposed $130 million office tower in Auckland has been selected as preferred relocation option for a potential tenant. Negotiations are expected to continue through until the first-half of 2010, the trust said in a Nov. 6 statement on an offer of up to $150 million of convertible notes.

APN News & Media, publisher of the New Zealand Herald, gained 3.2% to $2.87 and trucking firm Mainfreight Ltd rose 2.8% to $5.50.

Pike River Coal fell 2.8% top $1.03 and Telecom Corp. slid 1.2% to $2.49.

Businesswire.co.nz

Comments from our readers

No comments yet