MARKET CLOSE: NZX 50 snaps 4-day losing streak; GPG gains

Friday 15th May 2009

New Zealand’s NZX 50 Index snapped a four-day losing streak after Guinness Peat Group gave a market update showing it’s surviving in a tough market and property investors such as Kiwi Income Property Trust indicated they don’t need to tap investors for more capital.

The NZX 50 rose 14.77, or 0.5%, to 2790.89. Within the index, 20 shares rose, nine fell 21 were unchanged. Turnover was $88 million.

Guinness Peat (NZX: GPG ), the diversified investment group that counts Ron Brierley as chairman, rose 6.7% to 80 cents. Today Brierley said trading “has held up as well as could be expected” at its principal operating subsidiary, Coats, given the economic downturn. GPG is concentrating on “exit options to maximise the realisation of those investments which no longer have future potential” and examining new prospects,” Brierley said.

“They’re doing everything they can in an operating environment that’s not good but things may have bottomed,” said Paul Robertshawe, who helps manage about $3.6 billion at Tower Asset Management.

Kiwi Income Property Trust (NZX: KIP ) rose 1.1% to 94 cents after posting a 1.8% drop in so-called distributable profit slipped 1.8% to $61 million.

Full-year net income turned to a loss of $168.9 million as the value of its portfolio fell by 10%.

Goodman Property Trust (NZX: GMT ) rose 1.2% to 83 cents after yesterday lifting its annual distribution to shareholders after refinancing debt and selling assets. Like KIP, its posted a net loss after taking account of a drop in the value of its portfolio.

“There’s quite a lot of pressure on valuations,” Robertshawe said. The property trust’s units probably gained amid relief they weren’t planning to tap investors for more funds, he said.

Jeweller Michael Hill International (NZX: MHI ) gained 4.8% to 65 cents and foodmaker Goodman Fielder (NZX: GFF ) rose 4.7% to $1.57. NZ Farming Systems Uruguay gained 4.4% to 47 cents.

Government figures today showed retail sales dropped by a record 2.9% in the first quarter, led by auto-related outlets and home appliances, underlining the reluctance of consumers to spend in a shrinking economy as job losses mount.

Warehouse Group (NZX: WHS ), the biggest retailer on the NZX 50, fell 1.6% to $3.69. Hallenstein Glasson Holdings (NZX: HLG ) dropped 3.5% to $2.50. Children’s clothing chain Pumpkin Patch (NZX: PPL ) fell 1.5% to $1.29.

“From here we expect the retail sector to show signs of modest recovery through the balance of 2009,” said Bernard Doyle, strategist at Goldman Sachs JBWere. Still “the weakening employment outlook will ensure any recovery is relatively stilted.”

TrustPower (NZX: TPW ), the energy company controlled by Infratil, rose 0.5% to $7.60 after lifting annual profit by 7.1% on increased electricity revenue after it reduced hedging while spot prices soared last year.

Infratil (NZX: IFT ) climbed 1.8% to $1.70.

PGG Wrightson (NZX: PGW ), New Zealand’s biggest rural services company, declined 3.6% to $1.35 after a Commonwealth Bank of Australia survey showed New Zealand commodity prices fell this week as the kiwi currency remained persistently high.The total cost of raw materials produced locally measured by the bank sank 2.6% to 133.3 on the CBA NZ Commodity Price Index, in New Zealand dollar terms, while the currency held above 59 US cents.

Tourism Holdings (NZX: THL ), which owns a fleet of rental campervans and has been hurt by a drop in visitors from North America and Europe, slipped 5.8% to 49 cents, the biggest decline on the index today.

L&M Petroleum (NZX: LMP ) soared 17% to 21 cents after the gas explorer said it was “cautiously optimistic” after finding coal seam gas at a test well in western Southland.

Businesswire.co.nz

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