MARKET CLOSE: NZ shares rise on Australian GDP; Pumpkin Patch gains

Wednesday 3rd June 2009

New Zealand shares rose after figures showed stronger-than-expected economic growth in the nation’s biggest export market, Australia, helping boost companies such as Pumpkin Patch that get a large portion of revenue across the Tasman.

The NZX 50 Index climbed 33.42, or 1.2%, to 2840.62, its third daily gain. Within the index, 26 stocks rose, 14 fell and 10 were unchanged. Turnover was $107.2 million.

Australia’s economy grew 0.4% in the first quarter, defying a global recession with the help of more than A$12 billion of fiscal handouts and a central bank that slashed its benchmark interest rate at a multi-decade low 3%. Agricultural exports surged and consumer spending grew. The S&P/ASX 200 Index rose 1.3% to 4008.80 as bank shares rallied.

On the NZX 50, Pumpkin Patch (NZX: PPL ) rose 7.8% to $1.38, bringing its gain this year to 34%. Australia accounted for about 46% of revenue at the children’s clothing chain in the first half.

Goodman Fielder (NZX: GFF ), the Australasian foodmaker, jumped 4.9% to $1.71 on the NZX. Local shares of Telstra, Australia’s biggest phone company, rose 3.1% to $4.

Fletcher Building (NZX: FBU ) gained about 3% to $6.98, the highest since early May. The construction company today said chairman Roderick Deane would retire at the end of March 2010 and the board plans to appoint former chief executive Ralph Waters to the role.

Australia & New Zealand Banking Group (NZX: ANZ ) climbed 2.8% to $20.50, reflecting a rally in Australian banking stocks after the GDP report.

Restaurant Brands NZ (NZX: RBD ), which operates the KFC, Pizza Hut and Starbucks Coffee franchises in New Zealand, climbed 1.1% to 96 cents after posting a 4.3% gain in quarterly sales as pizza sales growth returned for the first time in four years. The shares have surged almost 60% in the past six months.

“The current economic environment has not adversely impacted on the continued overall positive sales growth for the company,” it said in a statement.

New Zealand Farming Systems Uruguay (NZX: NZS ) fell 3.8% to 51 cents and was the biggest decliner on the benchmark index after the price of milk powder slumped 12% in Fonterra Cooperative Group’s latest online auction. The drop at the auction has stoked concern protectionist moves by Europe and the US will undermine any recovery in dairy prices.

“The subsidies in Europe and the US place some downside pressure on our prices – it’s definitely a worry,” said Philip Borkin, economist at ANZ National Bank. “The fall was quite a surprise” as there have been some signs that dairy prices had found a base, he said.

Businesswire.co.nz

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