NZX CLOSE: NZX 50 climbs to 6-week high; Westpac, PPL, GPG gain

Wednesday 3rd March 2010

New Zealand shares rose, pushing the NZX 50 Index to the highest level since January 26, as faster economic growth in Australia helped lift prospects for companies including Pumpkin Patch and Guinness Peat Group extended its gains on the promise of a “value” return.

The NZX 50 Index rose 15.28, or 0.5%, to 3198.52, extending its gains for a sixth session. Within the index, 23 stocks rose, 17 fell and 10 were unchanged. Turnover was $68.7 million.

Pumpkin Patch (NZX: PPL ) rose 2.4% to $2.14, its third straight gain. Australia’s economic growth accelerated in the fourth quarter, according to government figures today, while the kiwi dollar sank to a nine-year low against its Australian counterpart, making New Zealand products relatively more competitive.

Gross domestic product in Australia, the biggest market for New Zealand goods and services, expanded 0.9% from the third quarter, for an annual pace of 2.7%.

“If the Australian consumer is consuming and some of the stuff they are buying is ours then it has got to be a positive,” said Alan Moore, who helps manage $300 million at Milford Asset Management. A weak kiwi dollar against Australia’s currency “is helping things at the moment.”

Westpac Banking (NZX: WBC ) climbed 2.6% to $35.20, leading the index higher. The Australian lender today raised its variable home loan rate, following the central bank’s quarter point increase in the cash rate to 4% yesterday. Westpac cited higher funding costs stemming as a result of the global financial crisis.

Fletcher Building (NZX: FBU ), which sells insulation, sink-ware, concrete, laminated board and steel products in Australia, rose 1.6% to $8.10.

Telstra Corp (NZX: TLS ) Australia’s biggest phone company, climbed 2.1% to $3.82 on the NZX.

Guinness Peat Group (NZX: GPG ) rose 2.2% to 92 cents, the highest close in 14 months. On Monday, chairman Ron Brierley said a “value return” to shareholders was the company’s top priority, reviving an idea that was put on hold during the financial crisis. Details would emerge in the next two months, he said.

“The suggestion is they might return cash, or give GPG shareholders Coats shares,” Moore said. “The main thing is they have made that comment and will look pretty stupid if they don’t come up with something.”

Pan Pacific Petroleum (NZX: PPP ) tumbled 11% to 33 cents, having led gains yesterday. NZ Farming Systems Uruguay (NZX: NZS ) ended the day down 2.6% to 38 cents.

Allied Farmers (NZX: ALF ) shares extended their slide, falling 7% to 7 cents. The finance company this week released a valuation that showed Hanover and United assets it paid for with $400 million of its own shares are worth less than half that amount now. The assets have slumped to $175.5 million under NZ IFRS reporting, from a gross realisation value of $396 million at the time the deal was announced last year.

Skellerup Holdings (NZX: SKL ) rose 3.6% to 58 cents.

Businesswire.co.nz

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