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MARKET CLOSE: NZ stocks rise to six-month high; Goodman Fielder leads gainers

Tuesday 2nd November 2010

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Goodman Fielder paced gainers on the exchange, while Vital Health Care Property Trust fell.

The NZX 50 Index rose 25.03 points, or 0.8%, to 3,324.76. Within the index, 27 stocks fell, 12 fell and 11 were unchanged. Turnover was $104.7 million, with the main board of the NZX regaining the value it lost as the economic recovery slumped in the middle of the year.

Goodman Fielder (NZX: GFF ) rose 4.8% to $1.96, hitting its highest level since late March. Freightways (NZX: FRE ) rose 2.6% to $3.14, and Argosy Property Trust (NZX: ARG ) rose 2.6% to 80 cents.

Sky City (NZX: SKC ) rose 2.3% to $3.16 and has jumped about 9% since announcing on Oct 29 that first-quarter 'normalised' profit rose 3.7% and full-year earnings would meet analyst expectations of at least $127.4 million.

“The companies that recently reported good results at their AGMs have continued to come in for good investor demand, with quite few bright spots from some of the mid-sized companies on the exchange,” said Grant Williamson, a director at Hamilton Hindin Greene.

“Additionally, investors have also continued to chase yields, and are looking for stocks that offer them good income. On the whole there has been good demand for New Zealand equities.”

NZ Farming Systems Uruguay (NZX: NZS ) , the dairy farm developer controlled by Singapore’s Olam International, rose 3.3% to 63 cents after it said its operating loss will be about triple its budget estimate.

Farming Systems expects an operating loss before interest and tax of US$16 million this financial year, compared to a budget forecast loss of US$5 million. On the same basis it had a loss of US$8 million last year. The EBIT loss excludes $4.6 million to break its contract with former manager PGG Wrightson.

NZX (NZX: NZX ) rose 0.6% to $1.58. The securities market operator today reported a slump in trading volumes and values in September compared to volumes for the same month a year ago.

Operational statistics for October show a 21% drop in total trades to 42,230 and a 10.3% fall in the value of daily trading to $102 million, although this was up 4% from the September 2010 average.

Vital Healthcare Property Trust (NZX: VHP ) fell 7.5% to $1.24 after it said it bought 12 private hospitals and medical centres across the Tasman for A$164.5 million, in a bid to take advantage of denser life insurance coverage in Australia.

Vital is looking to issue $150.9 million in a discounted rights issue to fund the acquisition, which will boost its portfolio by 70%.

“This is quite a large purchase for what is a relatively small listed property trust, on top of a large capital raising” Williamson said. “The news has knocked the share price as you would expect, with investors selling to take advantage of the rights issue when it becomes available.”

Pyne Gould (NZX: PGC ) fell 2.3% to 43 cents, New Zealand Refining (NZX: NZR ) fell 1.1% to $3.65, and Warehouse (NZX: WHS ) fell 1% to $3.96.

New Image Group (NZX: NEW ) fell 6.7% to 28 cents after announcing it had bought a controlling stake in New Zealand-based natural skincare company Living Nature.

The deal will see Living Nature issue new capital in the company, with the existing shareholders remaining on board, the company said in a statement.

The price of the 50.01% shareholding was not disclosed though New Image said it would add $6 million to annual revenue.

Allied Work Force (NZX: AWF ) was unchanged at $1.05 after it reported a 204% surge in first half profits driven by sales growth and cost cutting measures.

The shares have increased 10.5% this year. AWF's net profit for six months to Sept 30 rose to $1.74 million from $573,000 for the same period the previous year, the company said in a statement.

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