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NZX CLOSE: Shares rise for fourth day; offshore fund flows return

Wednesday 7th April 2010

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New Zealand shares gained for their fourth straight day as offshore investors returned to the local market at the start of the quarter, in a day where the headlines were dominated by Fonterra Cooperative Group.  

The NZX 50 Index rose 16.17, or 0.5%, to 3325.08. Within the index, 26 stocks gained, nine fell and 15 were unchanged. Turnover was a bigger-than-usual $125.9 million.  

“At the beginning of the quarter, you often see international fund flows impacting on the market,” said Steve Edwards, portfolio manager at Devon Funds Management.

“There’s been some good demand in Telecom from offshore. It’s at a pretty good price in the US and that’s helped push the market along.” 

Telecom, the country’s largest phone company, was unchanged at $2.24 on a turnover of $26.7 million.  

NZ Farming Systems Uruguay, the South American dairy farm developer, gained 2.6% to 39 cents in a day that was dominated by Fonterra.

The world’s largest dairy exporter put forward a capital restructure proposal to farmers that would allow them to trade shares among themselves and offer institutions and the public the opportunity to invest in a fund with arm's length exposure to Fonterra’s value-added activities.

Earlier in the day, the company’s online trading platform registered a 21% surge in whole milk powder prices.  The index was led higher by coal miner Pike River Coal, which rose 4.2% to 99 cents, while NZ Refining Co. clawed back some of its recent losses as it gained 3.7% to $3.94.  

KFC, Starbucks and Pizza Hut franchise holder Restaurant Brands more than doubled its full-year net profit at $19.5 million, and gained 3.5% to $2.10.  

“Restaurant Brands was a bit better than they flagged, and that explains the extra move up,” Edwards said.  

AMP and Australia New Zealand Banking Group rose 2.7% to $8.40 and 2.2% to $33.98 respectively, and Edwards said “when the currency’s weak against the Aussie the dual-listed companies perform pretty well.” 

Pyne Gould Corp., the parent of bank aspirant Marac, was the biggest decliner on the NZX 50, falling 2.1% to 47 cents after rivals PGG Wrightson Finance, of which PGC is a shareholder, and South Canterbury Finance were accepted into the government’s extended retail deposit guarantee scheme.

Allied Farmers, the Taranaki-based finance company that bought Hanover’s loan book in a debt-for-equity swap and missed out on entering the NZX 50 earlier this year, dropped 3.2% to 6 cents, a new low for the stock.

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