MARKET CLOSE: NZ stocks rise; APT, defensive stocks gain on troubled global outlook

Wednesday 7th July 2010

New Zealand stocks rose for their fourth consecutive session, coming off their lowest level since July 2009, lead by property stocks as investors sought holdings in companies with dependable earnings streams amid signs the global economic recovery is faltering.

The NZSX Property Group Index rose 0.8%. The NZX 50 rose 9.33 points, or 0.3%, to 2961.7. Within the index 19 shares rose, 15 fell and 16 were unchanged. Turnover was $52.3 million on a day marked by a lack of direction in the market.

AMP New Zealand Office Trust (NZX: APT ) rose 1.4% to 71 cents and Kiwi Income Property Trust (NZX: KIP ) rose 1.1% to 93 cents. Goodman Property Trust (NZX: GPT ) was unchanged at 90 cents and ING Medical Property Trust (NZX: ING ) was unchanged at $1.21.

“People are becoming increasingly bearish as the market weakens, and are heading to investments with defensive earning streams,” said Paul Robertshawe, who helps manage $220 million at Tower Asset Management. “Property stocks have that in the short run with contracted rents, so the risk is lower than the market on aggregate.”

Gainers on the day were lead by PGG Wrightson (NZX: PGW ), which rose 2% to 50 cents. Goodman Fielder (NZX: GFF ) rose 1.9% to $1.64 and Telecom (NZX: TEL ) rose 1.6% to $1.86.

Shares in Hellaby Holdings (NZX: HBY ) rose 5.3% to $1.60 after the company announced that it had reduced its debt by more than forecast in its latest year and said its balance sheet is strong enough to rule out converting capital notes to stock.

Nuplex (NZX: NPX ) rose 0.7% to $2.87, paring an earlier gain after the company shot down speculation that it was looking to merge its chemical trading unit with Australian company Orica.

Nuplex “spent a fair amount of time monetizing that asset in Australia, so it’s unlikely that Nuplex would just turn around and sell it, which is why reaction was fairly muted over the day,” Robertshawe said. “That said, if someone offers you a really good price you take it, but it doesn’t look like the case here.”

Kathmandu (NZX: KMD ) fell 2.5% to $1.95, which Robertshawe said reflected the continued uncertainty around retail stocks given the decline in consumer confidence over the course of the year.

“For Kathmandu, the six weeks to the end of July is their peak winter sales period and drives revenue for the rest of the year, so if people in consumer land are feeling a bit uncertain it weighs on the stock,” he said.

Freightways (NZX: FRE ) fell 2.6% to $2.62, and NZX (NZX: NZX ), fell 1.9% to $1.55.

New Zealand Oil & Gas (NZX: NZO ) fell 0.8% to $1.19, marking a new 12-month price low for the energy exploration and production company, on the back of an earlier announcement that output from its 12.5%-owned Tui oilfield has been cut by 300,000 barrels because of an extended shut-down at the Pateke-3H well.

Businesswire.co.nz

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