MARKET CLOSE: NZ shares gain; telcos rise, AMP, banks fall

Wednesday 28th October 2009

New Zealand shares rose today, led by by telcos Telstra and Telecom and supported by a bank survey showed business confidence remained high this month.

The NZX 50 Index rose 10.3, or 0.3%, to 3202.78. Within the index, 22 stocks rose, 18 fell and 10 were unchanged. Turnover was $120.3 million. The National Bank Business Outlook showed business confidence held near the previous month's high in October. Investors are awaiting Reserve Bank Governor Alan Bollard's review of monetary policy tomorrow, amid expectations he will signal an end to the easing cycle.

Telstra (ASX:TLS) climbed 3% to $4.07 on the NZX after Australia’s biggest carrier confirmed its earnings guidance and talked up the prospects for its A$12 billion systems upgrade to deliver earnings, irrespective of whether it is forced into structurally separating its assets. Telecom (NZX: TEL ) climbed 2.4% to $2.55.

Nuplex (NZX: NPX ) gained 0.8% to $2.41 after managing director John Hirst said increasing demand and lower costs in Asia have resulted in “strong” profit growth in the region. The shares are up 28% in the past three months.

“This company has a very long history of achieving ok returns through the cycle,” said Paul Robertshawe, who oversees $250 million at Tower Asset Management. “I’m pretty comfortable with them.”

AMP (ASX:AMP) fell 3.8% to $7.40, leading a decline by Australian financials after National Australia Bank (ASX:NAB), that nation’s largest lender, posted a second-half net loss of A$75 million, reflecting an increase in provisions for bad debts and the costs of a tax case settlement for its Bank of New Zealand unit.

Australia & New Zealand Banking Group slipped 2.3% to $28.50 on the NZX and Westpac Banking Corp. fell 1.5% to $33.20. National Australia dropped 3% to A$29.76 on the S&P/ASX 200 in Sydney, having climbed 33% in the past three months.

Tower’s Robertshawe said there was “nothing sinister” in NAB’s results and the stock had rallied extraordinarily hard going into the results.”

“The price had run a bit ahead of itself,” he said.

New Zealand Oil & Gas (NZX: NZO ) rose 1.2% to $1.73 as crude oil edged back toward US$80 a barrel. Crude oil for December delivery rose 14 cents to US$79.69 a barrel in Asian trading.

Development costs on the Kupe gas field have risen, with NZOG’s share of costs creasing by up to $20 million, managing director David Salisbury told shareholders at their annual meeting today. NZOG’s final contribution would be $195 million to $200 million," he said.

PGG Wrightson (NZX: PGW ) rose 3.3% to 63 cents, clawing back some of yesterday’s 10% slump.

The company has defended its choice of cornerstone shareholder, Agria Group, which still hasn’t filed its 2008 annual report in the U.S. and is facing class action suits over its 2007 IPO.

Wrightson says it is confident Agria will overcome its issues and provide a foothold in the Chinese market for everything from rural supplies to livestock breeding.

Businesswire.co.nz

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