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MARKET CLOSE: NZ stocks rise as corporate earnings hit forecasts

Thursday 19th August 2010

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New Zealand stocks rose as corporate earnings were largely in line with market expectations, with Mainfreight leading the way higher as its first-quarter profit surged.

The NZX 50 rose 11.6 points, or 0.4%, to 3029.8. Within the index 20 stocks rose, 15 fell and 15 were unchanged. Turnover on the day was $64.7 million.

“New Zealand results have met forecasts so far, which is why markets are trading in positive territory,” ING New Zealand equitieis manager Craig Brown said. “It is still a difficult environment to give guidance in with the current economic climate, and the themes we’re seeing from companies going forward are ‘caution’ and ‘uncertainty’.”

Mainfreight (NZX: MFT ) rose 2.9% to $6.70 after it posted a 148% gain in first-quarter profit on the back of sales growth. Net profit rose to $6.8 million in the three months ended June 30, from $2.75 million a year earlier.

The company stemmed losses in its American unit, which broke even, and said that business is being helped by continued strong sales growth.

Freightways (NZX: FRE ) rose 1.7% to $2.92 helped pace gains.

APN News & Media (NZX: APN ) rose 2.6% to $2.41 regaining some of the ground it lost yesterday.

Fisher & Paykel Appliances (NZX: FPA ) rose 1.9% to 52 cents, and takeover target NZ Farming Systems (NZX: NZS ) rose 1.6% to 64 cents.

Fletcher Building (NZX: FBU ) rose 1.2% to $7.43.

Port of Tauranga (NZX: POT ) rose 1.2% to $6.74 after the company reported its annual earnings met its guidance, and said rising volumes and cost controls will allow it to maintain profit growth through 2011.

Underlying earnings rose 9.3% to $49.4 million in the 12 months ended June 30. Net profit for the year fell to $38 million from $45.1 million in the previous year after the company recognised an unrealised decline in the value of its deferred tax asset of $10.5 million due to changes to tax rules on depreciation, and $2.3 million relating to impairment on asset values.

Air New Zealand (NZX: AIR ) rose 0.8% to $1.18 after it announced it carried more passengers in July than in the same month of 2009, up 7.2% to 1.16 million, with the strongest growth coming from domestic routes and across the Tasman Sea.

Shares in ING Medical Properties Trust (NZX: ING ) were unchanged at 68 cents after the trust announced that it will lift its distributable profit 13% to $11.7 million as it boosted rental income and maintained a near-full occupancy rate. The stock gained 4.7% in value so far this year, and is the only listed property investor in the top 50 to do so.

Shares in Affco (NZX: AFF ) were unchanged after major shareholder Talley’s Group announced that it was lifting its offer price to match today’s market price of 38 cents.

AMP (NZX: AMP ) fell 4.8% to 6.40, leading declines on NZX, while shares on the ASX were last trading 4.1% down at A$5.10.

The company had earlier reported a 4.4% increase in underlying earnings in the first half, to A$383 million in the six months ended June 30, but said it remains cautious about the global economic outlook. Net profit rose 17.4% to A$425 million.

Manufacturers paced declines on the NZX50, with crystal oscillator maker Rakon (NZX: RAK ) falling 1.9% to $1.05, carpet maker Cavalier (NZX: CAV ) dropping 1.5% to $2.55 and F&P Healthcare (NZX: FPH ) declining 1.1% to 2.80.

Goodman Fielder (NZX: GFF ) fell 0.6% to $1.57 after the company posted an 8.3% decline in full-year profit, reflecting a decline in revenue and one-time charges for tax changes and costs of an asset sale blocked by regulators.

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