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Market Close: NZX 50 gains for fourth day, financials rise

Monday 3rd November 2008

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New Zealand's NZX 50 Index rose for a fourth straight day, led by Australian financials and Fisher & Paykel Appliances on optimism the world's governments may be doing enough to avert a global slump.

The NZX 50 rose 1.3% to 2856.664, the highest close in seven trading sessions. ANZ Banking Group rose 4.6% to NZ$20.70 on the NZX, tracking Australian banking shares higher as interbank lending costs fell and the central bank injected about A$1.5 billion into money markets today. Westpac Banking Corp. rose about 2.6% to NZ$24 and insurer AMP Ltd. rose 4.6% to NZ$6.43.

The S&P/ASX 200 Index rose 3.2% in mid-afternoon trading, amid speculation the Reserve Bank of Australia will lower its benchmark rate 50 basis points to 5.5% tomorrow to stoke the economy of New Zealand's biggest export market. South Korea's KOSPI Index advanced 2.4% after the government pledged to pump almost US$11 billion into its economy. New Zealand's NZX 50 has rallied from a four-year low.

"It's good to buy in terms of valuations," said Craig Brown, who helps oversee more than NZ$2 billion at ING
New Zealand. Still, "the global growth outlook and global GDP forecasts are not great - people need to get their heads around that."

Investors will get more evidence of the severity of the downturn in New Zealand with the release of employment figures on Thursday. The unemployment rate rose to 4.3% last quarter from 3.9%, according to the consensus in a Reuters survey.

Companies including Carter Holt have cut jobs as the economy endures its worst economic downturn since 1998.

F&P Appliances jumped almost 6% to NZ$1.43 on optimism the New Zealand dollar's 19% slide against the U.S. dollar in the past three months will help lift returns from exports. F&P Healthcare gained 1.7% to NZ$3.02 and is up 4% in the past three months, while the NZX 50 dropped 15%.

PGG Wrightson Ltd., the nation's biggest rural services company, rose 2.9% to NZ$1.75 after Silver Fern Farms terminated an agreement for Wrightson to acquire a half stake in the cooperative. Wrightson, which couldn't secure the finance to settle the first payment, has dropped almost 40% in the past three months.

Goodman Property Trust rose about 1% to NZ$1.05 after settling its sale of two properties for NZ$22.95 million. The trust's units have fallen 28% this year.

Property For Industry was unchanged at NZ$1.06 and has declined 26% this year. The industrial property investor managed by AMP Capital Investors posted a nine-month loss after lowering the value of its portfolio by 6.6%. Excluding the property revaluation and other unrealised items, profit rose.

TrustPower, the utility controlled by Infratil, was unchanged at NZ$7.40 after reporting first-half profit rose to NZ$66.8 million in the six months ended September 30, from NZ$64.3 million a year earlier.


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