MARKET CLOSE: NZOG pares gains before second blast rocks Pike mine

Wednesday 24th November 2010

New Zealand stocks rose for the second time in three sessions, led higher for much of the day by New Zealand Oil & Gas which moved to recover some of the value it shed yesterday, before easing off just ahead of the close on news of a second blast at the Pike River Coal Ltd. mine.

The NZX 50 Index rose 10.44 points, or 0.3%, to 3,269.21. Within the index, 25 stocks rose, eight fell and 17 were unchanged. Turnover was $88.9 million.

NZOG (NZX: NZO ) rose 2.3% to 89 cents. Shares traded as high as 96 cents during the day, before late reports of a second "massive" explosion at Pike's West Coast coal mine saw it give up some of its headway. Officials said there was now no chance of the 29 trapped miners surviving, and rescue teams had now moved into recovery mode.

"At the moment NZOG's price is moving on speculation of what will happen with Pike, and we can certainly expect a lot of volatility going forward," said James Lee, head of institutional equities for First NZ Capital. "Ignoring fair value, NZOG put out statement saying Pike was worth 41 cents a share to them, so if it is no longer a going concern that's where we would start pricing."

PGG Wrightson (NZX: PGW ) rose 6.5% to 49 cents, pacing gainers on the exchange. Yesterday the company announced that it had bought South Australia-based Keith Seeds. The deal follows the recent acquisition in New Zealand of the Corson Grain maize seed business. The price of the transaction was not disclosed.

AMP NZ Office Trust (NZX: ANO ) rose 4% to 78 cents, Fisher & Paykel Appliances (NZX: FPA ) rose 3.4% to 61 cents, and Pyne Gould (NZX: PGC ) rose 2.6% to 40 cents.

Kathmandu (NZX: KMD ) rose 0.7 to $1.56 after it reported a 9.3% increase in sales in the first 16 weeks of the financial year and predicted earnings growth in 2011.

Sales rose to $51.6 million in the 16 weeks ended November 21, or 2.1% on a same-store basis, down from growth of 19% a year earlier, chief executive Peter Halkett told shareholders at their annual meeting today.

Vital Healthcare Property Trust (NZX: VHP ) rose 0.9% to $1.12 after shareholders approved plans to raise funds to acquire properties in Australia and were told the trust plans to amend its fee structure.

The trust plans to raise $150.9 million in a one-for-one rights issue at $1.05 apiece. Funds raised will help meet the A$164.5 million cost of acquiring 12 hospitals and medical properties from Essential Healthcare Trust, lifting the value of Vital's portfolio by 70% to $513.8 million.

Lee said that while the move was a win for the fund, the market had expected it to given the thumbs-up and had already priced it in.

Sky Television (NZX: SKT ) rose 0.2% to $5.28 after it launched its iSky online portal today, but said subscribers will have to wait a few more weeks before they can access the service.

The internet based service will be free to Sky subscribers based on their existing channel subscriptions at first, with access for non-subscribers at a later date.

Rakon (NZX: RAK ) fell 2.5% to $1.16, pacing decliners.

Fisher & Paykel Healthcare (NZX: FPH ) fell 2.3% to $2.95, having trimmed its earnings forecast for the full-year after unfavourable currency movements and tax charges eroded its first-half result, while R&D and selling costs rose.

Net profit for the six months to September 30 fell 54% to $16.9 million compared the same period in the previous year, and sales fell 3% to $245 million.

DNZ Property (NZX: DNZ ) fell 1.7% to $1.19, Nuplex (NZX: NPX ) fell 1.5% to $3.25, and Warehouse (NZX: WHS ) fell 1.1% to $3.73.

TrustPower (NZX: TPW ) fell 0.7% to $7.35 after going ex-dividend.

Ecoya (NZX: ECO ) was unchanged at 78 cents, after it reported a $2.6 million first-half net loss on sales of $4.4 million and said it is on track to meet its May prospectus forecasts.

The result includes one month's trading from skincare company Trilogy purchased on September 1. Excluding Trilogy, sales were $3.1 million for the six months compared with $3.9 million for the year ended March.

The prospectus forecast sales in the year ending March 2010 would be $8 million and the company would make a net loss of $5.1 million.

BusinessDesk.co.nz

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