New Zealand stocks rose, with the NZX 50 Index rounding out its first weekly gain
this month, amid optimism worldwide efforts by governments and central banks will
help lift the global economy out of its slump.
The NZX 50 rose for a fourth day, climbing 42.216, or 1.6%, to 2710.96. The benchmark
index is still lower than it was before the six-day slump that preceded its rally.
Within the index today, 31 stocks rose, 13 fell and six were unchanged.
rose 6.1% to NZ$1.40. That’s lower than its IPO price
though it has jumped from its record low reached Nov. 20 of NZ$1. Some 151,000
shares of the maker of crystal oscillators changed hands today. The company released
a statement by the Guardians of New Zealand Superannuation denying media reports
that the fund manager would sell the shares to comply with its responsible investments
criteria. Specifically, the requirement to eschew holdings of companies associated
with the manufacture of nuclear weapons.
Resins maker Nuplex Industries
the biggest trucking company, on the NZX 50 were the two largest gainers on the
benchmark. Nuplex rose 8.7% to NZ$3.75 and Mainfreight gained 6.6% to NZ$4.85.
rose 5.5% to NZ$2.90.
Craig Brown, who helps oversee NZ$2 billion at ING New Zealand Ltd., said it isn’t
clear whether the improved week signals “stability or the eye of the storm.”
“Volumes are very low; we’ve got a holiday in the U.S.; it’s
the last day of the month,” Brown said. “It’s a day-by-day thing
at the moment.”
fell 2.1% to NZ$5.58 after government figures
showed New Zealand home-building approvals dropped to a record low last month
amid evidence of a prolonged recession which is driving up the jobless rate and
eroding household incomes. Building approvals fell 22% seasonally adjusted in
October, according to Statistics New Zealand. The company also fielded reports
that some executives opposed the Formica purchase and chairman Rod Deane reportedly
responded that the board had full confidence in current CEO Jonathan Ling.
Economists have posted ever bigger estimates of the central bank’s expected
rate cut next week. A reduction of 150 basis points would trim the official cash
rate to 5%. The U.S. and other leading nations have been forced to make second-round
bailouts and revisit formerly rescued companies for increased assistance, a sign
that some banks haven’t been able to contain the impact toxic mortgage related
Brown said there’s concern some securitized mortgage packages are still
sitting on finance company balance sheets at excessive prices. A big rate cut
by the central bank may be on the cards. “Desperate measures call for desperate
Stocks mainly rose in Asia today. Japan’s Nikkei 225 Index was up 0.7% to
8432.32 in midday trading. The Hang Seng was up 2.2% in Hong Kong. Australia’s
S&P/ASX 200 Index advanced 4.3% to 3742.5. Biggest gainer was Babcock &
Brown Infrastructure soaring 67% to 7.2 Australian cents. Babcock & Brown
Power jumped 46% to 5.7 cents.
Resources stocks rallied. Kagara gained 24%. Fortescue Metals advanced 11%.
In New Zealand, Kiwi Income Property Trust
was the biggest decliner,
falling 5.6% to NZ$1.01. Telecom
rose 4.6% to NZ$2.49. The phone
company today said it has started inbound roaming on its W850 network. That’s
where overseas visitors can roam under reciprocal rights with their own carrier.
The roaming arrangements are with Telstra and the Digicel Group, which covers
some Pacific Islands.
ING’s Brown said stocks with high P/E ratios were getting punished, including
Australia’s CSL. Some stocks are now at attractive valuations. Brown said
he is “looking to nibble.” Still, he “doesn’t really have
the conviction to really swing the bat.”
Some well-run companies “seem to be cheap” provided the investors
can take a five-year view, he said.
NZX Top 50
Last updated: 28/11/2008 5:09pm
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