MARKET CLOSE: NZX 50 rises, strong companies favoured

Friday 27th March 2009

Shares rose, led by companies with strong management and solid balance sheets such as Contact Energy and Fletcher Building.

The NZX 50 Index gained 1.4% to 2653.47, its first in three sessions. Within the index, 22 stocks rose, 14 fell and 14 were unchanged. Turnover was $74.8 million.

Fletcher Building rose 4.2% to $6.40 and is up 17% in the past month. The stock has been lifted with Australian building related companies, on optimism incentives and grants across the Tasman will help lift the industry.

"There's quite a significant change of view in the outlook for residential housing market in Australia," said Craig Brown, who helps oversee some NZ$1 billion at ING New Zealand Ltd. "Everybody is trying to pile in there to get some housing exposure, and Fletcher Building has some of that exposure as well."

On the ASX in Sydney today, Stockland rose 11% to A$3.29, Mirvac climbed 9.9% to A$94.50, Boral advanced 5.5% to A$3.67 and CSR gained 5.8% to A$1.27.

The S&P/ASX 200 Index rose 0.7% to 3672.30. and Japan's Nikkei 225 Index gained 0.1% to 8645.51

Contact rose 6.2% to $6.15 in Wellington, leading the NZX 50 higher today

Nuplex Industries, which has underwriting for its share issue, tumbled 14% to 89 cents. Brown said some investors may be waiting to pick up the rights on-market.

"There's still a lot of uncertainty," Brown said. "You're starting to see more companies announcing layoffs, starting to see some of the economic impact of the downturn starting to bite a little more."

Brown name-checked Fletcher, Contact and Fisher & Paykel Healthcare, which rose 1.6% to $3.20 today, and Freightways, unchanged at NZ$2.95.

Air New Zealand rose 5.6% to 94 cents. The company is "caught in a difficult environment," Brown said. Long distance fliers such as Emirates can fly from Dubai to Australia then chose to park the plane in New Zealand at a marginal cost. "That's really hard." On domestic routes Air New Zealand was dominant, he said.

Figures today showed New Zealand's economy shrank a smaller-than-expected 0.9% in the fourth quarter, still the biggest slump in 16 years, as manufacturing and household spending weakened. The contraction was within forecasts, when including the central bank on 0.8%.

Other figures showed a pick up in merchandise trade, mainly as imports weakened more than exports. Some economists say New Zealand's economy will slow enough to bring the current account gap into line.

Kiwi Income Property Trust fell 1% to 97 cents after the nation's biggest listed property investor said the value of its portfolio fell more than 10% last year.

Businesswire.co.nz

Comments from our readers

No comments yet