Market close: NZ Stocks rebound, Telecom gains from decade low, banks surge

Tuesday 14th October 2008

New Zealand shares rebounded, lifting the benchmark NZX 50 Index from a four-year low, amid optimism concerted efforts by governments in Europe and the U.S. will help restore confidence to the global financial system.

The NZX 50 rose 166.581, or 6%, to 2948.974, its first gain in eight days, as at the 5 p.m. close of trading in Wellington. Twenty seven stocks in the index rose more than 5% and six jumped more than 10%.

The index had shed NZ$5.3 billion during its seven day slide, part of a global rout that abated after European nations pledged to guarantee their banks and flooded the market with dollars. Reuters reported today that the U.S. plans to inject US$250 billion into its banks, buying stakes in Bank of America, Wells Fargo, Citigroup, JPMorgan Chase & Co, Goldman Sachs, Morgan Stanley and Bank of New York Mellon Corp.

The Nikkei 225 Index soared more than 13% in Tokyo, following the Dow Jones Industrial Average’s record points surge yesterday.

“Governments and central banks are doing their utmost to deal with the situation - they'll do whatever it takes to stabilize," said Rickey Ward, who helps manage about NZ$205 million at Tyndall Investment Management. “"A lot of fund managers have cash sitting in their fund and are waiting to see what happens,” he said.

Telecom, the biggest stock on the bourse, rose from its lowest level since 1992, gaining 4% to NZ$2.58. At today’s price it has a dividend yield of 17% and is trading at 6.7 times earnings. Australian rival Telstra trades at 13 times earnings.

Contact Energy Ltd., the biggest energy company on the NZX 50, rose 6% to NZ$7.47, paring its decline this year to 15%, about half the NZX 50’s slide. Ryman Healthcare soared 16% to NZ$1.63 and has dropped 26% in the past month.

Fisher & Paykel Appliances Holdings Ltd. climbed 9.6% to NZ$1.49. The stock has slumped 60% this year amid concern a housing slump in the U.S. and waning demand in Australia and New Zealand will hamper sales growth for its washers, stoves and fridges.

The manufacturer today said it will sell a vacant 4.3 hectare site in Auckland for a tax-free capital gain of about NZ$6.3 million, which will be taken in the second half. It also announced it has condition agreement from Fonterra Cooperative Group to acquire its Mosgiel site.

Fletcher Building Ltd. gained 8.6% to NZ6.35, trimming its decline the past month to 24%.

Australian bank stocks in New Zealand soared on optimism about the Australian government’s guarantee of bank deposits, including wholesale deposits from inter-bank transactions.
ANZ Bank climbed 13% to NZ$20.71 and Westpac rose 7.1% to NZ$25.70. Insurer AMP gained 11% to NZ$7.55.

Australia’s S&P/ASX 200 Index rose 3.3% to 4332.1 in mid-afternoon trading.

NZ Farming Systems Uruguay gained 5.5% to NZ$1.15 after postponing plans to raise more capital selling shares to buy land in Uruguay and possibly Brazil. The company cited global turmoil and a slump in is own share price for the decision. The stock has dropped 28% in the past month.

PGG Wrightson Ltd., which owns about 11% of NZ Farming Systems and hold a management contract, rose 6.7% to NZ$1.76.

National Property Trust rose 4.6% to 46 cents after the property investor said it is in talks about a possible merger of its property portfolio and has hired PricewaterhouseCoopers (PWC) to consider options ranging from capital ranging to liquidation of the trust.

(Businesswire.co.nz)

NZ Top 50	2,948.974	+166.581 (+5.99%)
ASX 200	4,335.200	+154.500 (+3.70%)
Dow	9,387.61	+936.42 (+11.08%)
Nasdaq	1,844.25	+194.74 (+11.81%)
FTSE 100	4,256.90	+324.84 (+8.26%)

Last updated: 14/10/2008 5:08pm

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