MARKET CLOSE: NZ shares rise in subdued trade; Rakon, AIA, NZO Gain

Monday 26th April 2010

New Zealand shares rose for the fourth day in five. Rakon Ltd. rose as some investors sought stocks that have under-performed in recent months and Auckland International Airport edged higher after saying volumes were boosted by Australian visitors and domestic routes.

The NZX 50 Index rose 4.591, or 0.1%, to 3306.252. Within the index, 25 stocks rose, 13 fell and 12 were unchanged. Turnover was a lower-than-average $46 million, partly reflecting Australian investors being off for the Anzac Day public holiday.

Rakon, which makes crystal oscillators used in navigation systems and mobile phones, rose 5% to $1.05. The shares have tumbled from around $5.50 in late 2007, reaching their nadir at 63 cents in March 2009. In the past 12 months the stock has sunk 25% while the NZX 50 climbed by about the same amount.

“People have been looking at stocks that have been a bit beaten up,” said David Price, a broker at Forsyth Barr. Some investors had become disenchanted with the company when it missed forecast milestones, he said.

Auckland International Airport rose 0.5% to $2.02 after New Zealand’s busiest gateway said passenger volumes and aircraft movements climbed last month, led by visitors from Australia and an increase in domestic traffic. Excluding transits, international passenger volumes grew 3.9% in March, the airport said in a statement today, reflecting a 15.8% increase in arrivals from Australia.

Shares in NZX, the bourse operator and regulator, increased 2.8% to $1.85 after the company said more than half of its shareholders elected to take their dividend as bonus shares rather than a cash dividend of 6.5 cents a share.

Oil and petroleum explorer New Zealand Oil & Gas gained 1.3% to $1.56 while Pan Pacific Petroleum Ltd., which is part-owned by NZOG, rose 2.9% to 36 cents after Brent Oil climbed 1.8% to US$86.13 per barrel.

Commodity prices round the world have firmed after a better than expected first-quarter earnings season in the U.S. stokes investors’ appetite for higher yields. ForBarr’s Price said “you can’t argue some of the economic numbers have been better and there have been revisions up from anaemic forecasts.

“But when you look at some of the profits (in the US) a lot of the profit targets have been met by cost-out rather than by topline growth. Of course, when thing do uptick, the leverage effect will be huge,” he said.

Children’s clothing chain Pumpkin Patch stock gained 0.9% to $2.22 after it announced plans to launch a new, cheaper brand in stand-alone stores to tap demand for so-called everyday clothes.

Insurer Tower, which is part-owned by Guiness Peat Group, sank 0.5% to $2.01 after the Australian government announced it would ban financial advisers from accepting commissions, prompting New Zealand’s industry body, the Investment Savings and Investment Association to indicate its members, including Tower Asset Management, will go down a similar path.

Businesswire.co.nz

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