NZX CLOSE: NZ shares gain; Fletcher trade dominates, FPA gains

Wednesday 10th February 2010

New Zealand rose in a session dominated by an $8.7 million line of Fletcher Building shares changing hands. Fisher & Paykel Appliances led the advance. AMP NZ Office Trust led property investors lower as investors digested looming tax changes.

The NZX 50 Index rose 9.056, or 0.3%, to 3085.507, the first gain in four days. Within the index, 24 stocks rose, 15 fell and 12 were unchanged. Turnover was $145.6 million, with about half of that made up of Fletcher.

Shares of New Zealand’s biggest construction company (NZX: FBU ) climbed 1.2% to $7.55, with 9.9 million shares changing hands, including about 8.7 million in a single trade, amounting to 1.4% of shares on issue. The stock has sunk about 7% in the past three months, lagging behind the NZX 50’s 3% decline.

“Someone has run out of patience and placed it (Fletcher) at a discount,” said Paul Robertshawe, who manages $250 million of equities at Tower Asset Management.

Investors are preparing for an earnings season which may be characterised by tepid earnings growth, a sign that the road out of recession in the six months through Dec. 31 was slow and bumpy.

“Perhaps we’ve got another quarter of caution from the companies themselves before they show much widespread confidence,” Robertshawe said. Retailers may be “a highlight” apart from Warehouse Group, amid early signs consumers are willing to open their wallets again.

Postie Plus (NZX: PPG ), the clothing retailer, rose 2.6% to 40 cents today. The company had a "significantly lower" loss in the six months ended Jan. 31 than the $2.7 million reported for the same period in 2008 as sales rose and its margin widened, it said today.

Warehouse (NZX: WHS ), the biggest retailer on the NZX 50, last month said first-half profit would be “similar” to last year’s after sales were flat in the last two months of 2009. The shares rose 0.5% to $3.80 today.

AMP NZ Office Trust (NZX: APT ) fell 2.6% to 74 cents and Kiwi Income Property Trust (NZX: KIP ) dropped 1.9% to $1.02, erasing their gains of yesterday which had been spurred by relief looming tax reforms didn’t include a land tax. Still, the government is signaling it intends to extract more tax from the property sector.

“Yesterday people were relieved it was not the worst possible outcome,” Robertshawe said. “Today they’ve realised it’s still a bad outcome. The property trusts are in for a couple of tough years.”

ING Property Trust (NZX: ING ) fell 1.3% to 77 cents and Property for Industry declined 0.9% to $1.13.

Pike River Coal (NZX: PRC ), which is preparing to raise more capital to tide it over until it can make export sales from its mine, gained 2.3% to 90 cents. BHP Billiton, the world’s biggest mining company, today reported first-half earnings more than doubled, beating estimates. Analysts expect coking coal contract prices could jump 50% in BHP’s second half.

Pan Pacific Petroleum (NZX: PPP ) rose 2.6% to 40 cents.

Steel & Tube Holdings (NZX: STU ) fell 1.4% to $2.76. The supplier of steel building products is due to post its first-half results tomorrow, and Forsyth Barr analyst Rob Mercer expects sales to drop 31% and reported profit to tumble 79%, reflecting lower steel prices and volumes.

Horizon Energy Distribution (NZX: HED ) fell 4.1% to $3.74 after Eastern Bay Energy Trust, which owns 77.3% of the utility, suspended its takeover offer for the remaining shares while it seeks a High Court ruling on its rights under its trust deed.

Businesswire.co.nz

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