MARKET CLOSE: NZX leads gains on NZX 50; Healthcare falls

Monday 6th April 2009

New Zealand shares rose, led by market operator NZX Limited, joining a global advance on optimism the worldwide downturn is nearing an end, stocking investor appetite for risk.

The NZX 50 climbed 18.96, or 0.7%, to 2633.44. Within the index, 24 stocks rose, 12 fell and 14 were unchanged. Turnover was a mediocre NZ$55.9 million.

NZX rose 6.2% to $7.01 and has gained 23% this year. The exchange operated has diversified away from reliance on listing and trading fees, branching into the carbon market and making profitable acquisitions overseas. The company may lift earning by 8.7% this year, according to Reuters estimates.

The local stock market lagged behind the rally in Asia today, with Japan's Nikkei 225 Index gaining 1% and Hong Kong's Hang Seng climbing 3.4%. Holding back the NZX 50 has been a jump in the New Zealand dollar, which was recently at 59.33 U.S. cents, having climbed 18% in the past month.

Fisher & Paykel Healthcare, which gets 80% of its revenue in U.S. dollars, fell 3.9% to $2.94, a five-month low. Pike River Coal, which is scheduled to produce coking coal later this year, fell 3.7% to 79 cents.

The higher kiwi "could well act as quite a big drag" on the market, said Barry Lindsay, research manager at First NZ Capital.

"The market will recover long before there's any sign of improvement in economies around the world," he said. "It's a matter of judgment whether the recovery we're seeing in share prices is going to be followed by a pick-up in economic growth."

New Zealanders may be becoming a tad less pessimistic, according to Bank of New Zealand's monthly confidence survey, released today. Optimists matched pessimists this month. An improvement on last month's reading, when there were a net 23% of pessimists.

"Some respondents note recent stabilising in their sectors, but others also fear that the recent gains may be short-lived," said Tony Alexander, Bank of New Zealand's chief economist.

Electronic transactions weakened in March, after adjusting for the effect of Easter in the year-earlier month, according to Paymark, which handles about three-quarters of in-store electronic transactions. Travel spending dropped 14% while spending on accommodation slipped 8%, suggesting consumers are deferring expensive holidays.

Pay-television operator Sky Network Television fell 1% to $3.91. Warehouse Group, the biggest retailer on the NZX 50, declined 3.3% to $3.47.

Michael Hill International advanced 6% to 52 cents, making it the second-biggest gainer after NZX. The jeweler today reported a 9.9% gain in sales, reflecting a gain in Australian sales because of the weaker New Zealand dollar. In Australian dollar terms, sales across the Tasman gained 1.1%.

The retailer said sales growth was "achieved on lower margins" as a result of increased discounting.

Fletcher Building, the nation's biggest construction company, rose 5.1% to $6.20. The advance matched a rally in Australian building-related stocks. Boral rose 5.7% to A$3.91 on the ASX.

Businesswire.co.nz

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