MARKET CLOSE: NZ shares gain as dollar falls, FPA debt extended

Tuesday 28th April 2009

Shares rose, pushing the NZX 50 Index up for a second day, as a weaker kiwi dollar helped companies with offshore earnings and Telecom said its Chorus unit should be a key part of the broadband rollout.

The NZX 50 rose 22.07, or 0.8%, to 2686.44, with the benchmark index’s market value rising above NZ$30 billion for the first time in a week. Within the index, 22 stocks rose, 15 fell and 13 were unchanged. Turnover was NZ$65 million.

Shares are now significantly more attractive than cash or bonds amid signs the global economy is nearing the end of its downward spiral, according to AMP Capital Investors, the nation’s biggest fund manager, which $11 billion under management.

“For the very first time in a long time we are seeing some upward revisions to global growth estimates and risk assets such as equities are responding positively,” said head of investment strategy Jason Wong. “If not for the economic conditions, we’d be maxing out” our equity portfolio, he said.

Fisher & Paykel Appliances gained 2.3% to 45 cents after the whiteware manufacturer gained an extension on its $80 million interim banking facility. The funding was extended until May 29 from April 30, giving the company more time to arrange a more permanent restructuring of its debt.

“The Company’s expectation is that the interim funding facility will be repaid from the proceeds of that refinancing,” said managing director John Bongard. The shares have tumbled 67% this year.

Fisher & Paykel Healthcare climbed 2% to $3.01 as the New Zealand dollar slipped below 56 US cents for the first time in five days, amid concerns about the risk of a global swine flu pandemic. About 80% of Healthcare’s revenue is in US dollars and the company has gained along with health stocks worldwide as more cases of the flu are detected.

Tourism Holdings gained 4.4% to 47 cents, leading the NZX 50 higher. A weaker currency makes New Zealand a relatively cheaper destination for tourists.

Steel & Tube Holdings, which supplies steel building materials, climbed 3.9% to $2.65 after the company named CFO Tony Candy as acting chief executive after the departure of long-serving CEO Nick Calavrias. The company’s distribution manager, Steve Davies, will leave the company as a result of executive changes, it said.

NZ Farming Systems Uruguay fell 4.2% to 68 cents, the biggest decline on the NZX 50 after the South American dairy farm developer forecast a wider full-year loss because of the impact of drought on milk production. The loss before interest and tax is expected to be US$20 million, up from an earlier forecast of a US$11 million loss, the company said in a statement.

Contact Energy, which last week posted a decline in customer numbers, fell 0.9% to $5.55. National grid operator Transpower said there was an outage on the HVDC link that straddles Cook Strait because of a transformer fault at Benmore. Contact has been a leading critic of the decision to take down the aging Pole 1, limiting capacity and the ability to send power between the two islands.

Telecom rose 3% to $2.71. “Through Chorus, the Government can deliver more fibre, faster, to more people than any other company, and do it in a way that ensures that Chorus does not take one cent in profit from any government investment,” said chief executive Paul Reynolds, in a statement today.

NZX rose 1% to $6.82. The stock exchange operator said it is finalising an agreement to acquire Country-Wide Publications, which publishes NZ Farmers Weekly, Country-Wide North and Country-Wide South, NZ Dairy Exporter, Deer Farmer and Young Country. No price was disclosed.

Fletcher Building rose 2.2% to $6.38. The stock is rated ‘outperform,’ based on the consensus of estimates compiled by Reuters.

Businesswire.co.nz

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