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MARKET CLOSE: NZ shares gain; Nuplex, NZO, Pike advance

Tuesday 20th April 2010

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New Zealand shares snapped a three-day slide, led by Nuplex Industries and Pan Pacific Petroleum, after better economic news and corporate earnings in the U.S. and easing concerns about Goldman Sachs Group’s fraud charges.

The NZX 50 Index gained 10.908, or 0.3%, to 3293.106. Within the index, 25 stocks rose, 12 fell and 13 were unchanged. Turnover was $54.8 million.

Nuplex Industries, the specialty chemicals maker, climbed 3.2% to $3.22 while Skellerup Holdings, the industrial and agricultural products maker, climbed 3.3% to 62 cents.

"Companies exposed to industrial production globally are a good place to be,” said Guy Elliffe, head of equities at AMP Capital Investors in Wellington, which manages $11 billion. “Your Nuplex and Skellerup seem to be pretty good" and will also benefit from a weaker kiwi dollar.

Equity markets recovered across Asia today, with Japan’s Nikkei 225 Index rising 0.2% and Australia’s S&P/ASX 200 gaining 0.5%. The Dow Jones Industrial Average gained 0.7% yesterday in New York after reports that the US Securities and Exchange Commission was split in its vote to pursue fraud charges against Goldman Sachs, while Citigroup Inc. posted better-than-expected first quarter earnings.

“Corporate America is going reasonably well,” said Alan Moore, who helps manage $600 million at Milford Asset Management. In the New Zealand market, “it’s very hard to find companies that we can see are going to surprise us on the upside,” he said. “The market “has had a fantastic run and like most things you can’t keep on going forever.”

Pike River Coal rose 1.9% to $1.10 as the coal mining announced the details of its plans to raise $50 million in equity to cover the costs of moving to full production, including ramping up to hydro-mining and providing a cash buffer.The shares are being offered at 88 cents apiece, amounting to a 20% discount, on the basis of two for 19 already held. The capital raising is split $10 million in a placement and $40 million in a rights offer.

New Zealand Oil & Gas, which will take up its entitlement to Pike shares and subscribe for new bonds to repay existing debt, gained 2% to $1.54.

Pan Pacific Petroleum rose 2.7% to 38 cents as the price of crude oil rose amid speculation stockpiles in the US are in decline.

APN News & Media, the publisher of the NZ Herald, fell 4.3% to $2.87, the biggest decline on the index.

Telecom fell 0.9% to $2.15 after Telecommunications Commissioner Ross Patterson recommended that Communications Minister Steve Joyce study a new pricing plan from rival Vodafone New Zealand when he decides whether to regulate what phone companies charge rivals for ending calls on their networks.

AMP  fell 1.8% to $8.15 after Australia’s antitrust regulator shot down a rival bid for AXA Asia Pacific, leaving AMP in the box seat with its bid.

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