MARKET CLOSE: Wrightsons deal with NZ Farming Systems boosts market

Wednesday 28th July 2010

New Zealand stocks rose for the fifth time in seven sessions, helped into positive territory by PGG Wrightson, which lead gainers on the bourse on the prospects of a windfall gain from the sale of its stake in NZ Farming Systems Uruguay.

The NZX 50 rose 13.7 points, or 0.5%, to 3022.18. Within the with index 22 shares rose, 14 fell and 14 were unchanged. Turnover was $76.9 million in a market that traders described as “mixed” and “just going through the motions” ahead of reporting season in New Zealand. The local earnings season kicks off at the end of this month.

Shares in Wrightson (NZX: PGW ) rose 3.9% to 54 cents. The company is set to reap $15.5 million from the sale of its 11.5% holding in Farming Systems if Singapore's Olam International succeeds with its takeover offer at 55 cents a share. Shares in Farming Systems (NZX: NZS ) were unchanged at the offer price of 55 cents.

Separately, the company’s finance arm, Wrightson Finance, said it failed to get a quorum at a special meeting of bondholders to vote on extending the term of its October 2010 bonds for 12 months to the end of next year. It has $100 million of the bonds, which carry a coupon of 8.25%, and are currently set to mature on October 8, just inside the Crown guarantee. Wrightson Finance has been accepted for the extended guarantee which expires on December 31 2011.

Miner Pike River Coal (NZX: PRC ). rose 3.1% to $1, after Australia's Centennial Coal reported a 13% jump in third-quarter sales. Centennial has agreed to a A$2 billion takeover by Thailand's Banpu, which has prompted speculation about a consolidation in the coal sector.

“Any takeover or speculation of a takeover like that is bound to filter through to stock in that industry,” said Chris Slater, a senior dealer with Direct Broking.

Steel & Tube (NZX: STH ) rose 2.3% to $2.20, Fisher & Paykel Appliances (NZX: FPA ) rose 1.9% to 55 cents, and Telecom (NZX: TEL ) rose 1.6% to $1.96.

Shares in Freightways (NZX: FRE ) rose 1.5% to $2.72 after the company announced that is had teamed up with auction site Trademe.co.nz and was launching a delivery service specifically for the site’s customers.

Shares in mining equipment manufacturer Scott Technology were unchanged at $1.16 after the company announced that it expects to pay less than $1.5 million for the assets of a key supplier which will immediately contribute positively to earnings.

Michael Hill (NZX: MHI ) fell 2.9% to 68 cents, pacing declines on the NZX 50.

NZX (NZX: NZX ) fell 2.7% to $1.46, AMP (NZX: AMP ) fell 1.5% to $6.51, and Warehouse (NZX: WHS ) fell 1.4% to 3.55.

Fletcher Building (NZX: FBU ) fell 0.8% to $7.68.

Direct Broking’s Slater said the company was coming under pressure in the Australia from competitors, and weaker building figures were weighing on the stock.

Abano Healthcare (NZX: ABA ) rose 1.9% to $5.30 after the company posted a full-year operating net profit that met its guidance at $4.4 million and held off announcing a share buyback pending the possible sale of an associate company.

Businesswire.co.nz

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