Stocks rebound, Telecom gains from decade low

By Jonathan Underhill and Paul McBeth

Tuesday 14th October 2008

New Zealand shares rebounded, with the benchmark NZX 50 Index posting its first gain in eight days, amid optimism concerted efforts by governments in Europe and the US will help restore confidence to the global financial system.

The NZX 50 jumped about 7% to 2976.238 at 11am in Wellington. The index shed NZ$5.3 billion during its seven day slide. Today, the market capitalization climbed to NZ$34.4 billion. Telecom, the biggest stock on the bourse, rose 6.9% from its lowest level in at least a decade to NZ$2.65.

The Dow Jones Industrial Average had a record points surge and the Standard & Poor�s 500 Index had its biggest rally since the 1930s. European stocks gained after the region moved to guarantee its banks and flood the market with dollars to ease liquidity.

�Governments and central banks are doing their utmost to deal with the situation - they'll do whatever it takes to stabilize," said Rickey Ward, who helps manage about NZ$205 million at Tyndall Investment Management. �"A lot of fund managers have cash sitting in their fund and are waiting to see what happens,� he said.

Contact Energy, the biggest energy company on the NZX 50, jumped 7.8% to NZ$7.60, paring its decline this year to 15%, about half the NZX 50�s slide. Ryman Healthcare soared 18% to NZ$1.65 and has dropped 26% in the past month.

Fisher & Paykel Appliances Holdings climbed 11% to NZ$1.51. the stock has slumped 60% this year amid concern a housing slump in the US and waning demand in Australia and New Zealand will hamper sales growth for its washers, stoves and fridges.

The manufacturer today said it will sell a vacant 4.3 hectare site in Auckland for a tax-free capital gain of about NZ$6.3 million, which will be taken in the second half. It also announced it has condition agreement from Fonterra Cooperative Group to acquire its Mosgiel site.

Fletcher Building gained 9.1% to NZ6.38, trimming its decline the past month to 24%.

Australian bank stocks in New Zealand soared on optimism about the Australian government�s guarantee of bank deposits, including wholesale deposits from inter-bank transactions.

ANZ Bank climbed 17% to NZ$21.50 and Westpac rose 10% to NZ$26.48. Insurer AMP gained 14% to NZ$7.75. Australia�s S&P/ASX 200 Index rose 5.5% to 4422.8 in early trading.

NZ Farming Systems Uruguay gained 8.3% to NZ$1.18 after postponing plans to raise more capital selling shares to buy land in Uruguay and possibly Brazil. The company cited global turmoil and a slump in is own share price for the decision. The stock has dropped 28% in the past month.

PGG Wrightson, which owns about 11% of NZ Farming Systems and hold a management contract, rose 9.7% to NZ$1.81.

BusinessWire.co.nz

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