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MARKET CLOSE: NZX 50 edged up to 7-week high; Pike, Air NZ advance

Monday 8th March 2010

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New Zealand shares rose, nudging the NZX 50 Index up to a seven-week high as the kiwi dollar held near a decade low against its Australian counterpart, helping companies like Air New Zealand that rely on revenue from across the Tasman.

The NZX 50 climbed 8.17, or 0.3%, to 3222.81, its ninth straight gain to the highest since Jan. 21. Within the index, 24 stocks rose, 16 fell and 10 were unchanged. Turnover was a lower-than-average $47.3 million.

The New Zealand dollar recently traded at 76.80 Australian cents, near the lowest since 2000 against the currency of the nation’s biggest export market. Australia’s economy is accelerating enough to spur the central bank into raising tits cash rate since October, while the Reserve Bank of New Zealand is expected to keep rates low this week, in the face of a more tepid recovery.

“A lot of people are benefiting from the low (kiwi) dollar against the Australian dollar – any exporters to Australia or companies with good Australian operations,” said Stephen Wright, private client adviser at ASB Securities. Companies that get there revenue domestically “really need the economy to come right.”

Michael Hill International (NZX: MHI ), the jewellery retailer that counts Australia as its biggest market, rose 1.4% to 71 cents.

Sky City Entertainment Group (NZX: SKY ), the casino operator that’s garnering its fastest6 sales growth across the Tasman, climbed 0.9% to $3.32.

Air New Zealand (NZX: AIR ) rose 1.5% to $1.33 while Auckland International Airport, the nation’s biggest gateway, gained 1% to $1.94. Australia is New Zealand’s biggest source of visitors and a cheaper kiwi dollar means their money goes further when they visit.

Shares advanced across Asia, with the Nikkei 225 Index gaining 1.9% in early afternoon trading, after French President Nicolas Sarkozy pledged to support Greece while economic figures stoked optimism a global recovery will gather pace. The U.S. economy shed fewer than expected jobs last month while Japan posted a current account surplus in January on rising exports.

APN News & Media (NZX: APN ), the publisher of the New Zealand Herald, gained 2.5% to $3.23, leading the NZX 50 higher. The media company is rated a ‘buy’ by RBS Equities analyst Fraser McLeish, according to the ShareChat website. The Australian company’s cost cutting efforts should put it in a stronger position as the advertising market recovers, he said.McLeish is forecasting revenue growth of 6.6% in 2010 while costs rise 3.2%.

NZ Farming Systems Uruguay (NZX: NZS ), which develops dairy farms in South America, gained 2.5% to 41 cents and PGG Wrightson (NZX: PGW ), New Zealand’s largest rural services company, climbed 1.7% to 60 cents. Pyne Gould Corp (NZX: PGC )., which holds a stake in Wrightson, which in turn has a management contract with Farming Systems, gained 2.2% to 46 cents.

Pike River Coal (NZX: PRC ), whose $50 million capital raising is supported by major shareholders NZ Oil & Gas, climbed 2.3% to 89 cents.

Pan Pacific Petroleum (NZX: PPP ) sank 2.9% to 34 cents, having swung between gains and declines for the past week. It was the biggest decliner today.

AMP (NZX: AMP ), Australia’s biggest provider of pension plans, rose 1.7% to $7.95, tracking gains in its ASX-listed shares.

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