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MARKET CLOSE: Hallenstein leads NZ stocks in buoyant day's trading

Monday 27th September 2010

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New Zealand stocks rose for the first time in four sessions, as a wave of positive investor sentiment from Asia and Australia helped push the market out of the doldrums.  

Hallenstein Glasson lead local stocks after the company reported a jump in full-year profits amid challenging retail conditions.

The NZX 50 Index rose 27.9 points, or 0.9%, to 3,239.1. Within the index, 33 stocks rose, four fell and 13 were unchanged. Turnover was $78.5 million.

Australia’s ASX 200 Index was last trading up 1.5% at 4,668.5, and Asian markets were all trading in positive territory lead by Japan’s Nikkei which was last trading 1.2% up at 9,854.2, on the back of strong economic data from Europe and the US. Last week stocks in Europe rose after a key German survey of business sentiment reached its highest level in two years, while improving orders for durable goods in the U.S. propped up shares on Wall Street.

“Global markets are up, the Pacific markets are up and so is Australia, so it is partly a case of keeping up with the Jones’s with enough positive macro data out there to support it,” said Shane Solly, portfolio manager at Mint Asset management.

“In New Zealand we are not back to where were in April, with the months in between now and then being pretty so-so. We are seeing healthy bounce from being weaker.”

Hallenstein Glasson (NZX: HLG ) rose 2.9% to $4.42 and hit its highest level since December 2007 after the company posted a 53% jump in full-year profit with improved product offerings and a stronger kiwi dollar helping to increase margins.

Net income rose to $19.6 million, or 32.83 cents a share, in the 12 months ended August 1, from $12.8 million, or 21.46 cents a year earlier, the company said in a statement today. Sales rose 4.5% to $207.1 million.

The stock has risen 25% so far this year. AMP (NZX: AMP ) rose 3.2% to $6.71, Vector (NZX: VCT ) rose 2.7% to $2.27, and specialised office property investor AMP NZ Office Trust (NZX: APT ) rose 2.7% to 77 cents.

Air NZ (NZX: AIR ) rose 1.6% to $1.30. Chief executive Rob Fyfe told shareholders last week that the national carrier may be forced to cut routes if it can't revive its trans-Tasman alliance with Virgin Blue Holdings.

Australia's antitrust regulator rejected the proposal in a draft decision this month.

Kathmandu (NZX: KMD ) rose 2.3% to $1.82, its highest close since August 3.

The company on Friday announced a final dividend of 7 cents a share, up from the prospectus forecast of 6.7 cents. 

Chief executive Peter Halkett said while retailing remains challenging, Kathmandu is "well placed to continue our growth.

Shares in NZ Farming Systems Uruguay (NZX: NZS ) were unchanged at 69 cents after the company was officially declared a subsidiary of Olam International, with the Singaporean company controlling 78% of the shares in the company.

The commodities company, which itself is now in merger discussions with rival Louis Dreyfus Commodities, made an initial mid-July pitch to NZFSU shareholders at 55 cents a share, an offer that was lifted three weeks later to 70 cents a share.

PGG Wrightson (NZX: PGW ) fell 1.7% to 57 cents, leading declines on the NZX 50. Michael Hill (NZX: MHI ) fell 1.4% to 70 cents, Ebos (NZX: EBO ), the medical supplies distributor, fell 0.4% to $7.08, and Steel & Tube (NZX: STU ) fell 0.4% to $2.50.

Powerco (NZX: PWC ), New Zealand's second largest electricity network owner, with $430 million of bonds listed on the NZDX, today announced that its shareholders were maneuvering over ownership changes.

Queensland-based investment fund QIC is blocking the sale of the 42% of Powerco owned by Prime Infrastructure, which wants to sell the stake to Toronto-based Brookfield Infrastructure Partners, which is merging with Prime.

Brookfields already owns 40% of ASX-listed Prime and QIC owns 58% of Powerco and has exercised pre-emptive rights to block the sale of Prime's stake.

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