NZX CLOSE: NZ shares gain; Restaurant Brands leads advance, Ryman up

Tuesday 1st December 2009

New Zealand shares rose for a second day, led by Restaurant Brands, amid optimism about the prospects for the fast-food franchise operator that has revamped its stores to win back customers.

The NZX 50 index gained 21.07, or 0.7%, to 3146.60. Within the index, 29 stocks rose, 10 fell and 11 were unchanged. Turnover was $89.5 million.

Shares extended their gains for a second day after sinking on Friday amid global jitters about the potential for Dubai World to default on its debt. Across Asia, equity markets gained today after state-owned Dubai World began “constructive” talks with its lenders to restructure $26 billion of debt.

The Nikkei 225 climbed 1.6% in early afternoon trading. Australia’s S&P/ASX 200 Index edged up 0.1% after that nation’s central bank raised interest rates for a third straight month.

Restaurant Brands climbed 11% to $1.62, leading the NZX 50 higher. Last week the operator of KFC, Pizza Hut and Starbucks coffee outlets bumped up its full-year profit guidance by 50% to $17.5 million, citing better trading conditions. That was the second upgrade for this year’s profit.

“Restaurant Brand is definitely turning itself around, and that’s primarily on the back of their KFC chain” said Craig Brown who helps manage $3.3 billion at ING New Zealand.

“People getting a little more comfortable and getting back into equity is one of the ways they do that - putting money into growth assets as opposed to income assets,” he said.

Infratil Ltd climbed 1.2% to $1.65, adding to a 4.5% surge yesterday, when the investment group - the biggest shareholder in Australian alternative energy group Energy Developments - pledged support for a A$431 million takeover bid from a group affiliated to private equity firm Pacific Equity Partners.

Ryman Healthcare rose 3.5% to $2.06. Research firm Morningstar lifted its 2010 underlying net profit forecast to $58 million from $56 million and said Ryman “commands a strong position” in New Zealand’s retirement village sector.

Fisher & Paykel Healthcare climbed 0.6% to $3.20. The manufacturer’s respiratory humidification business, which lagged behind sleep apnea sales in the first half, will probably drive earnings growth through the remainder of the year as the company rolls out new products, said Morningstar analyst Nachi Moghe, who rates the stock ‘accumulate.’

Sky City Entertainment Group, the nation’s biggest casino operator, rose 2.3% to $3.50. The $59 million sale price for its cinema business is good relative to its expected, said ASB Securities analyst Florian Burch, according to the ShareChat website.

NZX Ltd, manager of the stock exchange, edged up 0.1% to $7.85 and has climbed almost 60% this year. The bourse manager recorded its strongest trading month in 2009 in November. Total trades climbed 12% to 46,524 last month from November 2008, while the daily average rose 7% to 2,215, NZX said in a statement. The total value traded jumped 39% to $2.02 billion.

“The more defensive nature of the New Zealand market has really held us in good stead,” said Fiona Mackenzie, NZX head of traded products. “There’s less exposure to financial and commodity stocks” with a greater weighting for telecommunications and utilities.

Air New Zealand gained 3.3% to $1.25 after reporting a 4.1% decline in passenger numbers in October to 931,000. The airline’s load factor climbed by 3.3 percentage points as the airline trimmed capacity by 10.3%.

New Zealand Refining was the biggest decliner on the benchmark index, falling 5.6% to $4.25.

Businesswire.co.nz

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