NZX CLOSE: Shares gain on optimism for recovery; Fletcher rises

Monday 7th September 2009

New Zealand shares rose for a third day amid optimism the economy is showing signs of recovery, boosting the prospects for company earnings hammered by recession. Fletcher Building, the biggest construction company, was among gainers.

The NZX 50 Index climbed 24.36, or 0.8%, to 3122.69, the biggest gain since August 28. Within the index, 26 stocks rose, eight fell and 16 were unchanged. Turnover was $69.4 million, with more than a quarter of that made up of Fletcher shares. A pending public holiday in the U.S. on Monday may have trimmed volumes.

Fletcher Building (NZX: FBU ) gained 1.2% to $7.95 after QV Valuations said property valued improved for a fourth straight month in August, while the average sale price climbed 0.7% to $385,426. In Australia, the building industry’s contraction slowed in August on resurgent demand for housing, according to a survey from the Australian Industry Group.

Port of Tauranga Ltd (NZX: POT ), the nation’s biggest export port, rose 1.1% to $6.63 and Auckland International Airport Ltd., the busiest passenger gateway, rose 1.7% to $1.80.

New Zealand’s economy probably emerged from recession this quarter, helped by an improvement in global conditions, increased migration and a revival in business and consumer confidence, according to the Treasury’s latest monthly economic assessment.

International data point to “an improved outlook, but still fragile recovery,” the Treasury said. “A small decline in real GDP in the June quarter is likely to represent the last quarter of contraction in the current sequence which dates back to March 2008.”

Michael Hill International (NZX: MHI ), the jewellery chain that counts Australia as its biggest market, rose 4.1% to 76 cents, leading the NZX 50 higher. The shares have climbed 59% in the past six months.

Tapmaker Methven Ltd (NZX: MVN ) gained 3.3% to $1.55 and rubber good manufacturer Skellerup Holdings (NZX: SKL ) rose 3.3% to 62 cents. NZ Farming Systems Uruguay (NZX: NZS ) fell 2% to 49 cents, the biggest decline on the benchmark index. ING Property Trust (NZX: ING ) fell 1.3% to 75 cents.

Dorchester Pacific (NZX: DPC ). tumbled 12% to 15 cents after the finance company in moratorium told investors that its full-year target to break-even “remains achallenge with the running down of the receivable books and the increasing compliance and listing related costs. Executive director Paul Byrnes said while Dorchester may be able to participate in some financial market consolidation, “our lumpy property loan book and debenture liabilities are challenges in any consolidation.”

L&M Petroleum Ltd (NZX: LMP ). gained 8.3% to 13 cents after the oil and coal-seam gas explorer said it began talks with related party L&M Coal Seam Gas about acquiring “part, or all of the LMCSG corporate entity or asset base.”

Businesswire.co.nz

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