Tuesday 16th December 2008
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New Zealand stocks rose, with the NZX 50 Index snapping a two-day slide, on
perceptions some stocks have become more attractive after the benchmark’s
35% slump this year.
The NZX 50 rose 18.654, or 0.7%, to 2695.084. Within the index, 22 stocks rose, 15 fell and 13 were unchanged or untraded. APN News & Media rose 9.4% to NZ$2.90 closing the gap with its Australian stock after its recent advance. Nuplex Industries rose 6.4% to NZ$2.98 and Rakon rose 6.1% to NZ$1.40.
Stocks advanced even after a survey of analysts showed the economy may be heading for its worst year since 1992 and evidence piled up for a prolonged worldwide economic slump.
“There’s an awful lot of bad news built into share prices,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “Overall, these are very attractive levels but there’s an element of risk.”
Telecom gained 1.7% to NZ$2.40 after Moody’s Investors Service said it may cut the phone company’s A2 long-term credit rating as a shrinking New Zealand economy exacerbates the impact of competition, which has squeezed its profit margin. The shares have tumbled 45% this year.
Jewellery chain Michael Hill International rose 1.7% to 61 cents after announcing a plan to sell its intellectual property – the Michael Hill Jeweller System - to its Australian subsidiary for $293 million., reaping tax benefits. The retailer also said trading conditions have been "very challenging."
Fletcher Building, the nation’s biggest construction company, rose almost 3% to NZ$5.93 after a survey of more than 550 property investors, run by Mike Pero Mortgages and the Landlords.co.nz website, found falling interest rates are making residential property investment more attractive.
Telstra Corp.’s New Zealand shares tumbled 10% to NZ$4.15 after brokerages including Macquarie Group and Goldman Sachs cut their ratings on the stock, after the Australian government yesterday rejected Telstra’s bid to build a nationwide high-speed Internet network. Telstra fell to a record low on the S&P/ASX 200 Index in Sydney.
The value of trade on the NZX was about NZ$75 million, up from its recent lows of less than NZ$50 million.
“Markets are thin and volatile – the fundamentals will influence their performance over time,” Walker said.
Among other gainers, Warehouse Group rose 5.2% to NZ$3.42 and Air New Zealand rose 4.8% to 88 cents.
The S&P/ASX 200 fell 35.2, or about 1% to 3556.2 in late afternoon trading, led by resources companies. Macarthur Coal dropped a record 22% to A$2.73 after cutting its profit forecast on less demand for the fuel. Woodside Petroleum fell 2.8% to A$34.54 after the price of crude oil sank almost 4% yesterday.
In Japan, the Nikkei 225 Index fell 1.2% to 8563.37 on concern the global economic slump will dent demand for exports and sap consumer demand in the world’s second-largest economy.
NZX Top 50
Last updated: 16/12/2008 5:08pm
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