CLOSE: Shares rise to 10-month high; Fletcher, Sky City gain

Thursday 13th August 2009

New Zealand shares rose in heavy trading, pushing the NZX 50 Index to a 10-month high, as Fletcher Building extended its post-earnings rally and Sky City Entertainment Group trimmed its debt levels by buying back bonds.

The NZX 50 gained 49.16, or 1.6%, to 3128.85, the biggest jumped in 18 trading sessions. Within the index, 35 stocks rose, 10 fell and five were unchanged. Turnover was $138.9 million, making it one of the busiest days this year.

Stocks rallied across Asia after Wall Street’s gains, spurred by the U.S. Federal Reserve’s comments that recession in the world’s biggest economy is easing.

Fletcher Building (NZX:FBU) rose 4.2% to $7.90, the highest level since reaching $8 on May 30 last year. Its advance mirrors a surge in building related stocks in Australia, which has skirted recession and is recovering from its downturn. Boral Ltd. gained 6.9% and James Hardie Industries NV soared 11%.

“A big component of its (Fletcher’s) business is in Australia – if they are going gung-ho over there it feeds back over here,” said Stephen Wright, a private client adviser at ASB Securities.

Steel & Tube Holdings (NZX: STU ) slipped 0.3% to $3.10. While full-year earnings climbed 16%, much of the gain was made in the first half, when steel demand and prices was running hot. Demand has since dwindled. The slump in the second half looks set to endure, the company said today.

“The company expects to see a continuation of the current soft volumes and resultant pressure on margins,” acting chief executive Tony Candy said.

Sky City (NZX: SKC ) rose 2.7% to $3.44 and has surged 26% in the past month. Earlier this year the company raised some $230 million in equity capital, saying while it wasn’t in dire need of the funds, it was a prudent step given the state of financial markets. Today the company said it was buying back an additional US$62.5 million of U.S. debt, helping trim its gearing ratio to 2.3 times from 3.3 times.

Michael Hill International (NZX: MHI ), the jewellery chain that counts Australia as its biggest market, gained 4.3% to 73 cents, its second daily gain after figures showed consumer confidence across the Tasman has jumped to a two-year high.

Turners & Growers (NZX: TUA ), the horticultural distributors, gained 1.9% to $1.58 after reporting an 18.6% list in first-half earnings. Full-year profit may lag behind last year’s, it said.

Opus International Consultants (OIC) climbed 2.3% to $1.32 after the infrastructure advisory firm posted a 44% fall in half-year profit as its U.K. and Australian operations’ “greater reliance on private sector clients” weighed on the bottom line.

AMP NZ Office Trust (NZX: APT ) rose 2.5% to 83 cents after announcing that full-year distributable earnings, the preferred measure used by trusts because it reflects earnings that can be paid out in dividends, rose 13% to $59.2 million.

Businesswire.co.nz

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