MARKET CLOSE: Pike River leads gains on NZX

Monday 11th October 2010

New Zealand stocks rose for the second time in three sessions, lead by Pike River Coal, after the company said it is on track to ramp up its hydro-mining production.

Broader influences from offshore markets were subdued with US markets closed Monday for Columbus Day.

The NZX 50 Index rose 2.2 points, or 0.06%, to 3,234.8. Within the index, 19 stocks rose, 16 fell and 15 were unchanged. Turnover was $77.3 million.

Pike River Coal climbed 6.2% to $1.20 after the company’s new chief executive Peter Whittall said that the coal miner reached its target for roadway development and came close to meeting a September 24 target of extracting 1,000 tonnes of hydro coal.

“Pike has been one of those stocks that has perpetually disappointed, so there is a certain amount of relief that they have achieved a target,” ING fund manager Craig Brown said. “They’re moving past the development phase and into the production phase, so investors can now focus on the macro issues affecting the stock price.”

Pyne Gould rose 5% to 42 cents, Cavalier rose 3.1% to $3, and Tower rose 1.7% to $1.83.

Scott Technologies, the Dunedin-based automated and robotic machinery maker, rose 7.7% to $1.04, the highest since February 2008, adding to its 4% gain on Friday, when it said profit jumped to $2.8 million from a year-earlier $400,000.

Investment company Hellaby Holdings rose 2.1% to $1.96 after the company said it will redeem $50 million of capital notes six months before they are due to mature, to take advantage of lower interest rates available through its core bank debt.

The company’s June 15, 2011, notes pay an annual coupon of 8.5% a year. The company will use provisions of its trust deed to repay the notes in full on December 15. It first sold the notes in 2006.

Allied Work Force rose 2% to $1 after the company said it had entered into a conditional agreement to buy specialist healthcare provider Panacea Healthcare as part of a strategic move to broaden the company's operations.

Panacea, formerly known as Auckland Nursing Bureau, provides ACC-funded nursing and support services to the disabled and elderly in the Auckland and Central North Island regions. No details on the conditions or price were released, although AWF said it will be funded through cash and bank debt.

Westpac rose 0.8% to $30.55 on the NZX on the Australian lender's plans to cut thousands of head office and administration jobs over the next two years as it attempts to reduce costs and streamline its business, according to press reports.

Westpac said it will also consider the possibility of sending back-office jobs overseas. The job cuts are only expected to affect Westpac's operations in Sydney. Shares last traded at A$23.09 on the ASX today.

Telstra rose 0.5% to $3.49 on the NZX, after the company said it may appeal a High Court ruling that allows Kordia to upgrade a fibre-optic network jointly owned by the two firms.

The ruling potentially clears the way for Kordia, a state-owned enterprise, to compete against TelstraClear in a number of cities and town in New Zealand. Telstra shares were last trading at A$2.68 on the ASX on Friday.

NZ Farming Systems Uruguay Ltd., the South American dairy operator, fell 3.1% to 63 cents, pacing decliners on the exchange.

Fisher & Paykel Appliances fell 1.7% to 57 cents, Property For Industry fell 1.6% to $1.21, and food ingredient maker Goodman Fielder Ltd. fell 1.1% to $1.76. Telecom fell 1% to $2.03.

AMP fell 0.7% to $6.86 on the NZX after the Australian wealth manager announced that it is switching to a fee-per-service based system for retail investors rather than a commission one. On the ASX shares were last down 0.4% to $5.26.

Businesswire.co.nz

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