CLOSE: NZ shares gain as kiwi weakens; FPH, Air NZ rise

Thursday 30th July 2009

New Zealand shares rose after Reserve Bank Governor Alan Bollard signaled he’s willing to cut interest rates again, driving the kiwi dollar lower and helping bolster the prospects for companies such as Fisher & Paykel Healthcare, which have offshore revenue.

The NZX 50 Index rose 3.53, or 0.1%, to 2994. Within the index, 18 stocks rose, 18 fell and 10 were unchanged. Turnover was NZ$92 million.

F&P Healthcare (NZX: FPH ), which gets almost 80% of its sales in U.S. dollars, rose 1.3% to $3.22 after the New Zealand dollar tumbled almost three-quarters of a U.S. cents to traded at around 65 U.S. cents. A weaker kiwi dollar boosts the value of overseas revenue when it is repatriated and makes goods and services priced in the currency relatively cheaper.

Bollard, who kept the official cash rate at 2.5% today as expected, said the high New Zealand dollar is helping keep the economy “weak,” thwarting the prospects of an export-led recovery. If the forecast recovery is put at risk “we would reassess policy settings,” he said in his statement.

Fisher & Paykel Appliances (NZX: FPA ) rose 1.2% to 86 cents. Air New Zealand gained 1.9% to $1.09 as a weaker currency makes New Zealand a relatively better value destination.

NZ Farming Systems Uruguay (NZX: NZS ), which this week secured a US$30 billion bond issue, jumped 8.5% to 51 cents.“Bollard is really in a bind at the moment as he can’t cut rates and risk the housing market getting away on him,” while exporters needing a weaker currency to bolster returns, said Philip Borkin, economist at ANZ National Bank.

Westpac Banking Corp (NZX: WBC ) climbed 1.9% to $26.65, mirroring a rally in lenders on the ASX today after Citigroup Inc. raised its ratings on Australia’s four largest banks to “buy” from “hold.” Analyst Craig Williams said the lenders had improved access to capital while the domestic slowdown was less severe than expected.

Australia & New Zealand Banking Group (NZX: ANZ ) rose 1.2% to $22 on the NZX and insurer AMP Ltd (NZX: AMP ) gained 2.3% to $6.75.

Mainfreight Ltd (NZX: MFT ), the biggest trucking firm on the NZX 50 Index, fell 3.5% to $4.38 after managing director Don Braid told shareholders he expects “this year to be a tough one and our first quarter results will reflect the tougher trading conditions we have encountered.” The company said it has rolled over about $200 million of bank facilities through until June 2012.

New Zealand Oil & Gas (NZX: NZO ) fell 1.3% to $1.58 as crude oil traded near a two-week low in Asia. Crude oil for September delivery sank to US$63.24 a barrel on the New York Mercantile Exchange in Asia’s day.

Businesswire.co.nz

Comments from our readers

No comments yet