NZX CLOSE: Shares edge higher as RBNZ keeps easing bias; FPA up

Thursday 10th September 2009

New Zealand shares rose after the central bank maintained its determination to keep interest rates low until the second half of 2010 to avoid snuffing out a fragile economic recovery. Fisher & Paykel Appliances led the advance.

The NZX 50 Index rose 10.27, or 0.3%, to 3126.68, the first gain in three sessions. Within the index, 23 stocks rose, 15 fell and 12 were unchanged. Turnover was a higher-than-average $130 million.

F&P Appliances (NZX: FPA ) rose 2.7% to 75 cents. The appliance manufacturer yesterday announced the sale and lease back of its East Tamaki head office and plant for $74 million, with the balance of the site conditionally sold for $21 million. Proceeds will allow the company to repay a debt facility six months earlier than expected.

Foodmaker Goodman Fielder (NZX: GFF ) rose 2.5% to $2.05 and Sky Network Television (NZX: SKT ) rose 2.2% to $4.65.

Reserve Bank Governor Alan Bollard kept the official cash rate at a record low 2.5% as expected and kept his easing bias in place.

“It would be a mistake to think that as growth gains momentum, the RBNZ needs to stomp on it straight away," said Stephen Toplis, Bank of New Zealand's head of research. "Things need to be even stronger than they are forecasting before they would raise interest rates.”

Telecom Corp (NZX: TEL ), the biggest company on the NZX 50, rose 0.7% to $2.72.

Fletcher Building Ltd (NZX: FBU ), the biggest construction company, declined 0.8% to $7.96. At a Goldman Sachs JBWere investment briefing, chief financial officer Bill Roest predicted a subdued outlook for 2010 with low activity levels expected in most markets.”

Pumpkin Patch (NZX: PPL ) rose 1.6% to $1.93 and Sky City Entertainment Group (NZX: SKC ) rose 2.2% to $3.26.

Cavalier Corp (NZX: CAV ) fell 0.8% to $2.48. The carpet maker is rated a ‘hold’ by analysts AspectHuntley, which said in a report that the company's high exposure to New Zealand and residential markets translate into earnings heavily impacted by recession.

Businesswire.co.nz

Comments from our readers

No comments yet