MARKET CLOSE: NZ shares gain for 4th day in 5; Infratil, NZOG rise

Friday 5th June 2009

New Zealand shares rose for the fourth day in five, with Infratil Ltd. gaining on a takeover proposal for its 32% owned Australian energy unit and New Zealand Oil & Gas climbing with the price of crude oil.

The NZX 50 Index rose 18.79, or 0.7%, to 2834.50. Within the index, 28 stocks rose, 13 fell and nine were unchanged. Turnover was $89.2 million.

Infratil (NZX: IFT ) rose 4.3% to $1.70 after offering an option over 19.9% of Energy Developments to a bidding group that’s made a takeover proposal to the Australian alternative energy company. Energy Developments stock jumped 12% to $1.63 on the ASX today, valuing Infratil’s holding at about A$72 million.

New Zealand Oil & Gas (NZX: NZO ) gained 4.5% to $1.62 after crude oil rose on an upbeat forecast from Goldman Sachs that the price of crude could reach US$85 a barrel by the end of the year. Crude oil for July delivery traded at US$69.38 a barrel in Singapore today.

Helping lift stocks is speculation the central bank may be prepared to cut the official cash rate to a new record low next week as longer-term interest rates stay stubbornly high and the kiwi dollar trades at stronger levels than the bank expected.

Governor Alan Bollard will cut the OCR by 25 basis points to 2.25%, according to a Reuters survey. Still economists are divided on whether he will act or keep his powder dry for a while longer, as Australia’s central bank has done.

“The market has a 50/50 split, but we’re in the hold camp,” said Khoon Goh, senior markets economist at ANZ National Bank. “Further cuts in the OCR will not likely to translate into lower lending rates” and we think the Governor should keep some ammunition up his sleeve, he said.

Fletcher Building (NZX: FBU ) slid 0.6% to $6.95 after the nation’s biggest construction company announced plans to close its particleboard factory in Kumeu, with the loss of 41 jobs. Returns from the plant have declined amid overcapacity in the industry and weaker demand, it said.

Australia’s APN News & Media (NZX: APN ) rose 13% to $1.92, leading the index higher. Foodmaker Goodman Fielder (NZX: GFF ) gained 5.9% to $1.79.

Fisher & Paykel Appliances (NZX: FPA ) fell 3.5% to 69 cents. The sale and lease back of its 14.4 hectare East Tamaki manufacturing site became unconditional today though the manufacturer didn’t disclose the price.

Tourism Holdings (NZX: THL ) fell 2% to 49 cents, bringing its slide this year to 25%. The company will issue a further 1.9 million redeemable shares to its chief executive and five other executives under its Long Term Share Scheme.

“There is no doubt that the outlook for the tourism industry remains uncertain,” chairman Keith Smith said. “The Board believes it is more important than ever to achieve strong alignment between shareholder and executive interests.”

Contact Energy (NZX: CEN ) fell 2.5% to $5.80. The biggest utility on the NZX 50 plans to hold its prices unchanged until at least October 2010 in Eastland, Hawke’s Bay, Christchurch, Hawke's Bay, Wellington and Christchurch, according to company advertisements.

Fisher & Paykel Healthcare (NZX: FPH ) rose 2.6% to $3.15. The New Zealand dollar has extended its slide since reaching an eight-month high of almost 66 U.S. cents earlier this week and was recently at 63.56 U.S. cents. A weaker kiwi boosts the value of overseas sales for the medical equipment maker, which garners almost 80% of its revenue in US dollars.

Businesswire.co.nz

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