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MARKET CLOSE: Mainfreight soars as investors welcome expansion

Monday 7th March 2011

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Mainfreight shares rose 5.79% today to a new record as investors expressed confidence the logistic's company's latest expansion offshore.

Mainfreight's (NZX: MFT ) shares rose 47c to $8.59 after the company said it has agreed to by Netherlands-based transport and logistics firm Wim Bosman Group for an initial purchase price of 110 million euro (NZ$209 million).

Grant Williamson at Hamilton, Hindin, Greene said that often when New Zealand companies made big acquisitions their share price fell, but Mainfreight was becoming a truly international logistic company.

The share price reaction showed that investors had confidence in Mainfreight's management.

Otherwise, the sharemarket was strong on a day other markets were weak as many investors anticipated that the official cash rate will be cut by the Reserve Bank of New Zealand on Thursday, making investments in shares more attractive.

Many economists are expecting the Reserve Bank will cut the OCR from 3% to 2.5% on Thursday, and today Prime Minister John Key said a cut in the rate would probably help the country.

The benchmark NZX-50 index closed up 11.948 points, or 0.35%, at 3430.054. Turnover was worth $155.75 million. There were 48 rises and 30 falls among the 114 stocks traded.

Xero (NZX: XRO ) rose 11c to $2.62 on a day it revealed US expansion plans at an investor day organised by NZX. NZX (NZX: NZX ) rose 1c to $1.86.

OceanaGold (NZX: OGC ) rose 5c to $3.47 and NZOG (NZX: NZO ) rose 2c to 90 on a day in which Canadian-listed Tag Oil reported an oil discovery at its onshore Taranaki.

Pumpkin Patch (NZX: PPL ) rose 7c to $1.35, while Kathmandu (NZX: KMD ) eased 4c to $2.01 and Hallenstein Glassons (NZX: HLG ) eased 3c to 43.55. Pyne Gold Corp (NZX: PGC ) rose 1c to 30, and SkyCity (NZX: SKC ) rose 3c to $3.48.

Fletcher Building (NZX: FBU ) rose 3c to $8.84, Contact Energy (NZX: CEN ) rose 1c to $6.09 and Telecom (NZX: TEL ) eased a cent to $2.15.

Auckland Airport (NZX: AIA ) rose 2c to $2.28, Infratil (NZX: IFT ) rose 2c to $2.00 and TrustPower (NZX: TPW ) rose 1c to $7.13.

Westpac (NZX: WBC ) eased 19c to $32.00, Tower (NZX: TWR ) eased a cent to $1.97.

In the US, Wall Street erased most of its weekly gains on Friday (local time) as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labour market news. US unemployment fell below 9 percent for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region.

The Dow Jones industrial average was down 0.7% at 12,169.88, the Standard & Poor's 500 Index was down 0.7% at 1321.15, and the Nasdaq Composite Index was down 0.5% at 2784.67.

For the week, the Dow rose 0.3% and the S&P and the Nasdaq both gained 0.1%.

 

NZPA



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