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NZX CLOSE: Shares rise; Windfarms gets good news, Contact gains, Wrightson sinks

Friday 26th March 2010

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NZ share rose today, kicking off gains in equity markets across Asia as European leaders prepare to meet to consider their bailout of Greece with the International Monetary Fund. New Zealand Windfarms Ltd. jumped 10% after gaining an advantageous consent to expand. Contact Energy Ltd. rose with wholesale power prices while PGG Wrightson Ltd. fell as investors eschewed rural plays.

The NZX 50 Index rose 2.93, or 0.1%, to 3240.447. Within the index, 14 shares rose, 22 fell and 14 remained unchanged. Turnover was $98.5 million.

Contact Energy, the biggest utility on the NZX 50, rose 1.8% to $6.23 a share, buoyed by rising wholesale power prices, as the electricity market revalues its stored water assets. Terrence Currie, Chairman of the Major Electricity’ Users’ Group, said high wholesale prices, “are out of step with current lake levels, which are average for this time of year.” Wholesale prices are sitting around 100% of average for this time of year, according to MEUG.

Shares rose across Asia today, with the Nikkei 225 index rising 1.5% and Australia’s S&P/ASX 200 rising 0.2%, on optimism, European leaders will succeed in their plan to help Greece avoid default.

Windfarms (NZX: NWF ) rose 10% to 33 cents a share today. The electricity generator today said it gained consent to expand its Te Rere Hau site into a windier area, making its turbines more productive. The company has received a confidence boost after Tyndall Investments disclosed that it had increased its stake in the company, to 11.5%.

“Our view is that the company offers more value than the current share price is suggesting,” said Rickey Ward, who helps manage about $500 million at Tyndall.

Wrightson (NZX: PGW ), the country’s largest rural services company, fell 3.3% to 58 cents. Fonterra Co-operative Group this week reiterated its milk fat payment, while posting a 3.7% decline in first-half sales. Meantime, a Hong Kong based investor group says it wants to spend as much as $1.5 billion on dairy farms and other assets around the country, a move that requires approval from the Overseas Investment Office.

“There’s still a bit of tension with the rural portfolio investment scheme,” said Stephen Wright, private client advisor at ASB Securities. “Even though the outlook for farmers is better and the finances have stabilised, there is reluctance in investors.”

Rakon (NZX: RAK ) was the biggest gainer on the NZX 50 today, up 4.2% to 99 cents.

Guinness Peat Group (NZX: GPG ) rose 1.2% to 87 cents a share. The investment company has announced its scrip dividend alternative, at 1 new share for every 35 owned.

Cavalier (NZX: CAV ) fell 3.5% to $2.80, the biggest fall on the benchmark index.

Telecom (NZX: TEL ) fell 0.9% today to $2.12. The phone company’s recent problems with its new XT network and forecasted losses due to a new rural broadband scheme have caused over the last two weeks its lowest share prices since the late 1990s.

Nuplex Industries (NZX: NPX ) rose 0.9% to $3.48 today. Chairman Rob Aitken said demand is recovering from the low point of the last financial year, but is still below its peak levels of 2007/2008. Nuplex is in a strong position,” he said. “We have a sound balance sheet and a good cash flow.”

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