By Peter V O'Brien
Friday 29th August 2003
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Companies in both markets enjoyed good earnings growth and share price gains.
As usual, there was a large range of movements in both measurements in both markets.
The Australian market and its companies understandably take second place to local developments when the New Zealand media report financial and corporate matters.
A discussion of Australian stocks in The National Business Review in March looked at capital and share price figures for the top 20 companies by market capitalisation, with prices taken as at February 19. The table lists the first 10 of that group and the percentage change in prices from February 19 to August 22. Percentage movements in the main New Zealand and Australian indices are included for comparison.
The 10 companies in the table were not the top by market capitalisation last Friday, AMP having dropped down the list, but it was useful to see what happened to those that led the way in February.
Changes in the indices showed Australia did better than New Zealand in the past six months on a capital basis.
Comparisons between the NZSX50 (a gross index) and the Australian measures are "apples with pears" exercises, although they might give NZX a warm feeling.
The price performance of the Australian banks was a feature of the 10's share price performance in the period.
Other companies in Australia and here did much better, but banks are massive organisations, it takes a solid effort to get share prices and capitalisations moving and they produce long-term steady capital appreciation, as opposed to flashy one-off gains.
Banks and other market heavyweights are planets of the equities' solar system, while some smaller groups may be comets in terms of short-term price spurts.
Australian-based heavyweights have much greater international activities than New Zealand companies, few of which direct overseas activities much beyond Australia. Their trading experience can therefore be a good guide to international economic trends.
New Zealand-listed Australian companies that reported by the start of this week include Ansell, Burns Philp, AMP, Lend Lease, News Corp, Santos and Spotless. There were only a sample of Australian groups listed here and less than a realistic cross-section of the ASX.
Even so, the results confirmed what ASX indices and share prices for specific companies have confirmed over the past six months: Australian companies generally had a good year.
Diversified packaging group Amcor improved profit before significant items 36.1% to $A431.4 million, although earnings after significants were down 57.6% due to the inclusion of a substantial profit on the sale of an investment in an associate company in the previous year. Amcor operates in Australia, New Zealand, Europe and Asia.
Ansell describes itself as a "global leader in healthcare products."
"With operations in the Americas, Europe and Asia, Ansell employs more than 12,000 people worldwide and holds leading positions in the natural latex and synthetic polymer glove and condom markets."
Profit improved solidly in the year ended June to $A49.9 million from the previous year's loss of $A115.8 million, the latter including operational and reorganisational losses.
Burns Philp is well known to New Zealanders through the operations of principal shareholder Graeme Hart, who effectively rescued the company, its share price and much of his personal wealth.
The group earned $A170 million for the year ended June, a 16.3% increase over the previous year, although the result included contributions from Goodman Fielder for the period from March 19.
Restructuring costs of $A48.7 million attributable to the Goodman Fielder acquisition were offset against those contributions.
Burns Philp's business segments cover yeast and bakery ingredients, herbs and spices and Goodman Fielder and are conducted in Europe, North and South America, Asia and the Pacific, including Australia and New Zealand.
It is consequently a true internationalist, like Amcor and Ansell and most of the companies in the table, all of which attract the attention of New Zealand investors.
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