Friday 17th October 2008
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New Zealand stocks rose for only the second time in 11 days, with Telecom
Corp. climbing from a record low, as the price of oil fell and optimism grew
that markets may be stabilising after a roller coaster week.
The NZX 50 Index gained 44.08, or 1.6%, to 2808.76. Stocks were mixed across the Asia Pacific region. Japan’s Nikkei 225 Index rose 1.6% in early afternoon trading, led by banks and automakers.
Australia’s ASX/S&P 200 Index fell 1.4% as weaker prices for oil and other commodities weighed on shares of BHP Billiton, Santos, Woodside Petroleum and Newcrest Mining.
Telecom rose 4.9% to NZ$2.34 today, trimming its slide this year to 50%. It reached a record low yesterday after cutting its earnings forecast. At today’s price, it has a dividend yield of 19%.
Reserve Bank Governor Alan Bollard will probably cut the official cash rate 100 basis points to 6.5% on Oct. 23, according to the consensus of estimates on Reuters. That may help ease credit costs in a shrinking economy.
“We are starting to see some stability come back into the market,” said Alan Moore, who helps manage about NZ$260 million at Milford Asset Management. Still, “the focus on the global recession is impacting on the thinking in the share market. The question is, are the dividends sustainable.”
Pumpkin Patch led the index higher, rising 8.6% to NZ$1.14 and Warehouse Group advanced 8.4% to NZ$3.87. Yesterday, Woolworths Ltd. withdrew a challenge to a court ruling blocking it from bidding for Warehouse, stoking speculation it may re-apply for clearance from the Commerce Commission.
Pike River gained 7 cents to NZ$1.36 after reaching coal at its mine. The global downturn to curb steel output and demand for coking coal next year, though that will be partly offset by a weaker New Zealand dollar, the company said today.
Fletcher Building rose 2% to NZ$5.98. The nation’s largest construction company has cut 600 jobs in the past three months in the face of a weakening economy, chief executive Jonathan Ling said, according to the New Zealand Herald.
NZ Farming Systems Uruguay fell 0.9% to NZ$1.14. The company that is developing dairy farms in the South American country may miss analysts’ earnings forecasts this year as prices of dairy products slide, chairman Keith Smith told shareholders at their annual meeting yesterday.
Sky Network Television Ltd. fell 1% to NZ$3.90. Much of the pay-television company’s costs are denominated in U.S. dollars, meaning it has to pay more for programming and equipment as the kiwi dollar weakens. New Zealand’s dollar has slid about 8% this month.
|NZ Top 50||2,808.765||+44.077 (+1.59%)|
|ASX 200||3,970.800||-42.600 (-1.06%)|
|FTSE 100||3,861.39||-218.20 (-5.35%)|
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