MARKET CLOSE: NZ shares post third consecutive gain

Wednesday 2nd December 2009

New Zealand shares extended their gains for the third session as global concerns about a debt default in Dubai abated. Rakon (NZX: RAK ) led the advance and PGG Wrightson (NZX: PGW ) rose on expectations its successful capital raising puts the company on a stronger footing.

The NZX 50 index gained 2.84, or 0.1%, to 3149.44. Within the index, 25 stocks rose, 14 fell and 11 were unchanged. Turnover was $68.9 million.

Stocks revived in Europe and the US overnight as Dubai began talks to restructure US$26 billion of debt and data showed manufacturing is expanding in the US. In Asia today, Hong Kong’s Hang Seng gained 1.2% in early afternoon trading and Australia’s S&P/ASX 200 rose 1%.

“It’s not as though it’s (Dubai World’s) an issue that’s likely to spread, or be systemic – compared to what we have seen in the last twelve months,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “I couldn’t see what everyone was getting so upset about.” Rakon, which makes crystal oscillators used in navigation system and mobile phones, climbed 3.6% to $1.15.

Wrightson, New Zealand’s biggest rural services company, gained 3.6% to 58 cents after the price of milk powder gained to a 15-month high in Fonterra’s online auction, boding well for dairy farmers. Wrightson completed its $250 million capital raising, allowing the company to repay debt and strengthen its balance sheet.

“The fact that it has been performing poorly in the past is due I think to uncertainty about its ability to raise capital,” Walker said.

ANZ rose 3.5% to $28.97, leading the advance in Australian financials on the NZX, which tracked their ASX-listed shares higher.

Westpac rose 1.8% to $31.26 and insurer and retirement plan company AMP (NZX: AMP ) gained 3% to $7.93.

New Zealand Oil & Gas (NZX: NZO ) advanced 1.8% to $1.70 after the price of crude oil climbed. Crude for January delivery traded at $78.27 a barrel during Asia’s day.

TeamTalk (NZX: TTK ) edged down 0.9% to $2.28 after the country’s largest mobile radio company said it mopped up the remaining shares in CityLink Ltd. through a share swap worth some $890,000.

Fisher & Paykel Appliances (NZX: FPA ) fell 3.3% to 58 cents. The manufacturer is under pressure to make further changes to its board and management after posting a first-half loss, the NZ Herald said today. Chairman Gary Paykel stepped down last week, to be replaced in the interim by Ralph Waters while the company searches for a replacement for CEO John Bongard, who left due to ill health.

Newly-listed Kathmandu Holdings (NZX: KMD ) fell 4.7% to $2.05, the biggest decline on the NZX 50.

Businesswire.co.nz

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