MARKET CLOSE: NZ stocks gain; Warehouse, retailers advance

Tuesday 6th January 2009

New Zealand stocks rose, sending the NZX 50 Index to the highest since early November, after Warehouse Group said it maintained its margins through the peak Christmas-New Year period and figures showed an increase in consumer spending last month.

The NZX 50 rose 38.49 to 2783.38, its sixth consecutive daily gain. Within the index, 32 stocks rose, 10 fell and eight were unchanged.

Warehouse rose 2.9% to NZ$3.58 after managing director Ian Morrice said margins were "at levels similar to last year" as the retailer cut costs and improved management of stock levels. First-half earnings before one-time items would about match last year's NZ$56.8 million.

Michael Hill International, the jewellery chain, gained 5.6% to 57 cents and children's clothing retailer Pumpkin Patch advanced 4.2% to NZ$1. The value of consumer spending rose 2.6% in December to a record NZ$4.04 billion, according to Electronic Transaction Services Ltd.

Some economists predict New Zealand will drag itself out of recession this year, helped by lower interest rates, a weaker currency, increased government spending on infrastructure and tax cuts.

"Provided we see stabilization in the global economy, the New Zealand economy will probably avoid a deeper recession during 2009," said Stephen Toplis, head of research at Bank of New Zealand.

Goodman Property Trust rose 4.2% to NZ$1 after the property investor said it completed refinancing of more than NZ$900 million in three-year debt facilities, giving the investment group more funding certainty in tight credit markets.

Carpet maker Cavalier Corp. rose 6.3% to NZ$1.87, leading the NZX 50 higher.

NZX Ltd., which manages the stock exchange, fell 1.5% to NZ$5.35 after releasing figures showing the value of trading fell 18% last year amid the worst equity slump since 1990. The total value trading in shares, debt securities and warrants fell to NZ$28 billion from NZ$32.7 billion the previous year, the company said.

PGG Wrightson Ltd., the nation's biggest rural services company, gained 6.2% to NZ$1.37.

Australia & New Zealand Banking Group Ltd. gained 40 cents to NZ$18.70 on the NZX and Westpac Banking Corp. advanced 1.5% to NZ$20.80, tracking an increase in shares of Australian banking stocks on the ASX. The S&P/ASX 200 Index rose 1.3% to 3735.7 in late afternoon trading.

Babcock & Brown, the investment group battling to avoid collapse after being caught short by the credit squeeze, soared 54% to 38.5 cents amid speculation its banks will approve its plan to sell assets to repay debt. Leighton Holdings fell 12% to A$25.06 after posting a 60% drop in first-half profit on write-downs of investments and forecasting a slide in full-year earnings.

The Nikkei 225 Index rose 0.6% to 9092.56 in early afternoon trading in Tokyo.

By Jonathan Underhill

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