MARKET CLOSE: NZ stock rise on buoyant offshore markets

Thursday 21st October 2010

New Zealand stocks rose for the first time in three sessions as the US sharemarket rallied amid stronger earnings on Wall Street.

Hallenstein Glasson, Vital Healthcare Property Trust and Michael Hill paced gainers on the day.

The NZX 50 Index rose 21.90 points, or 0.7%, to 3,264.91. Within the index, 23 stocks rose, nine fell and eight were unchanged. Turnover was $92.6 6 million. Stocks on Wall Street rose on upbeat earnings forecasts from Boeing and Yahoo and speculation the Federal Reserve will inject more money into the economy.

“The weaker dollar and quantitative easing have translated into people’s risk appetite increasing a bit, and today we saw the effects of that on overseas markets,” said Craig Brown at ING. “On balance if we get a good night like last night we tend to follow.”

Hallenstein Glasson (NZX: HLG ) rose 3.3% to $4.45, leading gains on the main board of the NZX. Vital Healthcare (NZX: VHP ), rose 3.1% to $1.35, and Michael Hill (NZX: MHI ) rose 2.75% to 75 cents.

AMP NZ Office Trust (NZX: APT ) rose 2.6% to 79 cents after unit holders shrugged off a bid by the Accident Compensation to dump the manager, and voted in favour of restructuring the unit trust into a company.

Between 81% and 83% of shareholders supported the resolution to convert ANZO into a company and introduce a new fee for manager AMP Haumi.

ACC, which owns 8.9% of ANZO, is opposed to the move because it says it would remove investors’ ability to dump the manager, which it claims has caused a loss in value for shareholders.

ANZO will suspend trading in its shares next week and will corporatise its structure from November.

“The proposal the trust put up wasn’t going to solve all the issues, but it was a good step in the right direction,” Brown said, noting that ING has a significant holding in the trust and voted for the restructuring.

Air New Zealand (NZX: AIR ) rose 2.3% to $1.34 after Wellington and Auckland airports dropped their objections to the airline’s proposed trans-Tasman alliance with Virgin Blue, following a commitment to increase flights and capacity on the route over five years.

Separately, the airlines chief executive Rob Fyfe was named chief executive of the year at the Centre for Asia Pacific Aviation awards in Singapore last night.

Allied Farmers (NZX: ALF ) rose 40% to 2.1 cents after the company said it had repaid its term loan facility with Westpac in full. The loan stood at $16,500,000 as of June 30.

Also, McGrathNicol, the receiver of Allied Nationwide Finance that collapsed in August, confirmed in its first report that the company's perpetual bondholders - owed $15.5 million - will get no payout from the government's retail deposit guarantee scheme.

At the time of receivership, there were suggestions around the market that the bonds - inherited by Allied when it bought Speirs Securities several years ago - might be eligible for repayment under the scheme.

Pike River Coal (NZX: PRC ) fell 2.9% to $1.02, pacing decliners on the NZX 50. Brown said the stock was still reaping some of the backlash from investors after it cut is production forecast for the year to between 320,00 and 360,000 tonnes from about one million tonnes of saleable coal.

Pyne Gould (NZX: PGC ) fell 2.4% to 40 cents, NZX (NZX: NZX ) dropped 1.9% to $1.58, and Steel & Tube (NZX: STH ) declined 1.2% to $2.40.

New Zealand Oil & Gas (NZX: NZO ) fell 0.8% to $1.28 after the company said technical issues would further delay production at its Pateke 3H well, situated offshore on the Tui oil field.

The news comes just 10 days after the energy exploration company resumed production at the well, following $46 million in repairs.

“It does have some cash flow and cost implications for NZO, but the overall impact is just a delay,” brown said.

Delegat’s (NZX: DGL ) was unchanged at $1.72 after the company bought the vineyard of failed Marlborough wine company Gravitas. Although the amount paid was not disclosed, estimates in the press put the purchase in the $12 million range.

Businesswire.co.nz

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