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MARKET CLOSE: NZ stocks extend gains; F&P Appliances leads advance

Wednesday 3rd November 2010

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New Zealand stocks continued their four-month rally, with investor sentiment on Asia Pacific markets buoyant ahead of an announcement by the US Federal Reserve on the long awaited second round of quantitative easing. Fisher & Paykel Appliances Holdings paced gainers, while Restaurant Brands fell.

The NZX 50 Index rose 8.3 points, or 0.3%, to 3,333.07. Within the index, 25 stocks rose, 12 fell and 13 were unchanged. Turnover was $115.3 million.

In late afternoon trade Japan’s Nikkei Index rose 0.1% to 9,159.9, Hong Kong’s Hang Seng Index rose 1.8% to 24,091.8, and Australia’s ASX 200 rose 0.55 to 4,726.9.

“If there is some quantitative easing this would be good for the kiwi dollar, which could spill over into the market,” said Karl Williscroft, a trader at Direct Broking. “We’re anticipating the Fed will announce US$500 billion in asset purchases - anything less would be a surprise.”

F&P Appliances (NZX: FPA ) rose 3.3% to 62 cents, leading gains on the main board of the NZX. AMP (NZX: AMP ) rose 2.6% to $7, Steel & Tube (NZX: STU ) rose 2.1% to $2.45.

Nuplex (NZX: NPX ) rose 2% to $3.53 after the industrial chemical and resin manufacturer told shareholders that profit for 2011 is likely to rise by as much as 17% provided the Australian and New Zealand dollars don’t appreciate much further and margins hold.

Net profit is anticipated to be in the region of $68 million to $75 million in the 12 months ending June 30, 2011, managing director Emery Severin said at the company’s annual meeting today.

That would top 2010’s record $64.2 million profit, which was a rebound from the previous year’s slump when the global financial crisis sapped returns.

Westpac (NZX: WBC ) rose 1.7% to $30.50 on the NZX and rose 1% to A23.54 on the ASX, after the lender’s New Zealand unit lifted annual cash earnings 36% as it slashed its provision for bad debts, even as its interest margins shrank, eroding profitability.

Cash earnings were $322 million in the year ended Sept 30, compared to $236 million a year earlier, the company said in a statement. That came as it cut its impairment charge 39% to $347 million in the period. Operating earnings fell 11% to $804 million as the lender’s interest rate margin fell 13 basis points.

Vital Healthcare Property Trust (NZX: VHP ) rose 1.6% to $1.26 after it said yesterday that it bought 12 private hospitals and medical centres across the Tasman for A$164.5 million.

Vital is looking to issue $150.9 million in a discounted rights issue to fund the acquisition, which will boost its portfolio by 70%.

Air New Zealand (NZX: AIR ) rose 1.5% to $1.36 after Australia's competition watchdog asked Jetstar to provide details of its domestic and Tasman expansion plans for the next three years as it considers whether to allow the alliance between the national carrier and Virgin Blue.

Restaurant Brands (NZX: RBD ) fell 2.8% to $2.76, paced decliners on the exchange. Williscroft said it look as if investors were looking to book gains following the stocks stellar performance in recent months.

Argosy Property Trust (NZX: ARG ) fell 2.5% to 78 cents, Warehouse (NZX: WHS ) fell 2.3% to $3.87, and Ebos (NZX: EBO ) fell 1.7% to $7.42.

Oyster Bay Marlborough Vineyards (NZX: OBV ) was unchanged at $1.85 after it said it is likely to announce proposed changes to its capital structure as early as this week after falling grape prices have left it in financial difficulty.

Oyster Bay reported a net loss of $841,000 for the year to June 30, compared to a $1.5 million net profit in the previous year.

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