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Thursday 7th May 2009 |
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Shares extended their gains, with the NZX 50 Index adding $2.5 billion to its market capitalisation in the past two weeks, as investors latch on to signs the global slump may be abating.
The NZX 50 rose 23.51, or 0.8%, to 2854.87, its eighth gain in nine sessions, bringing its market cap to $32.8 billion. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $99.2 million.
PGG Wrightson climbed 8.8% to $1.61 amid signs of a lift in prices of farm commodities. Nuplex Industries rose 8.1% to 40 cents and Pike River Coal gained 7.1% to 91 cents.
Shares rose after government figures today showed the jobless rate has gained less than expected to 5%. New Zeaalnd also followed Wall Street higher, as U.S. banks rallied on signs the stress-tests of lenders hasn’t showed up as much need for fresh capital as feared. Figures showing fewer than expected job losses at companies also helped lift shares. In Asia, Japan’s Nikkei 225 Index jumped 4.2% to 9352.89 and Australia’s S&P/ASX 200 climbed 1.5% to 3925.60.
“All these incremental things being slightly better is all the market needs to keep going at the moment,” said James Lindsay, who helps manage $400 million at Tyndall Investment Management. “There’s growing demand for cyclical stocks. People are looking for additional risk in their portfolios.”
Fisher & Paykel Appliances rose 4.9% to 64 cents. New Zealand’s largest whiteware manufacturer was asked to explain the recent surge in its stock price by the NZX and pointed to a pick-up in sentiment and gains in the shares of Whirlpool Corp. The shares have climbed from 46 cents at the start of the month.
Chief financial officer Mark Richardson reiterated that the company is considering a range of options to “strengthen its balance sheet” and will keep the regulator informed.
“Things are getting less worse in the U.S., and that’s a big part of their market,” said Craig Brown, who helps manage about $1 billion of assets for ING New Zealand Ltd.
Shares of Whirlpool have surged 17% in the past week amid optimism the U.S. recession is abating. Federal Reserve chairman Ben Bernanke this week said recession will give way to a slow recovery this year with the housing market showing signs of bottoming after the three-year slump. He predicted 2010 U.S. GDP growth of 2%.
Skellerup Holdings gained 5.3% to 60 cents and Sky City Entertainment Group climbed 5% to $2.93. Tower gained 4.8% to $1.54.
AMP NZ Office Trust was the biggest decliner on the index, sliding 8.4% to 76 cents after announcing plans to raise $201 million, while reducing dividend payments, to strengthen its balance sheet. The property investor is negotiating with its banks to repay a $242.5 million debt facility due to expire in October 2009, entering into a new $100 million facility for three years.The renounceable rights issue is for nine new units for every 20 held at 65 cents apiece, a 21% discount, to repay debt and reduce gearing to around 19.3%.
Tyndall’s Lindsay says the plan puts AMP Office’s gearing well below its peers at around 30% and will add to pressure for more property trusts to raise funds.“Everyone is trying to get to be the least risky, least geared,” he said. “I would be very, very surprised if we don’t see another one.”
Telecom fell 0.4% to $2.82. Vodafone Group, the world’s biggest mobile phone company, dropped its High Court injunction after Telecom agreed to increase filtering on its new network to prevent interference.The concessions mean a delay in the launch of Telecom’s XT mobile network, which had been slated for May 13 but will now be around the end of the month. The costs of extending filtering on its network are confidential, said Telecom spokesman Mark Watts.
Businesswire.co.nz
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