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Market Close: NZ shares gain for a third day, Methven rises

Friday 31st October 2008

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New Zealand stocks rose, rounding out three days of gains, as companies including tap-maker Methven, New Zealand Refining and Sky City Entertainment reported earnings or sales growth.

The NZX 50 Index gained 58.042, or 2.1%, to 2820.862, bringing its monthly slide to about 14%. That's about the same decline as Australia's S&P/ASX 200 Index, which rose about 0.2% today, led by News Corp., Westfield Group and Goodman Group.

Japan's Nikkei 225 Index was down about 1.1% in mid-day trading. Fuji Electric fell 16% and Pioneer dropped 13%. Stocks on Wall Street rose yesterday, sending the Dow Jones Industrial Average up 2.1% after a report showed the US economy shrank less than expected and some investors speculated interest rate cuts by central banks around the globe will help ease credit.

"The bears say a lot of issues the world is dealing with are insurmountable but I do feel the worst is over," said Barry Lindsay, research manager at First NZ Capital. "Equities generally are in the process of bottoming out."

Methven rose 5.7% to NZ$1.48, brining its three day advance to 18%. The company yesterday posted a 29% gain in first half earnings, boosted the first full six months contribution from Deva Tap in the UK.

New Zealand Refining rose 0.8% to $6, having slid 26% this year. The nation's only oil refinery said profit may rise as much as 12% this year after its processing margin widened. Net income may be between $115 million and $125 million, up from about $112 million last year.

Sky City rose 3% to $3.30. New Zealand's biggest casino operator today said group revenue rose 1% in the first quarter as gains from its Australian businesses made up for a drop at its largest complex in Auckland.

Vector rose about 1% to $2.06 after the antitrust regulator impose a pipeline price cut that lagged behind some analysts' estimates. New Zealand's biggest power and gas distributor was ordered to reduce fees by 3.7%, less than the 15% expected by First NZ Capital.

"That's actually quite a good outcome," Lindsay said.

Guinness Peat Group was unchanged at 95 cents after private equity firm Archer Capital made an offer for software producer MYOB, which is about 14% owned by GPG.

Warehouse Group rose 0.8% to $3.98 amid speculation Australia's Woolworths still wants to acquire the retailer after being knocked back in the courts.

Auckland International Airport rose about 4% to $1.83 as some investors deemed it relatively good value after a 14% drop the past month.

By Jonathan Underhill

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