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MARKET CLOSE: NZ stocks buoyed by offshore sentiment

Thursday 2nd September 2010

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New Zealand stocks rose for the second time in three sessions, as buoyant Asian and Australian markets helped maintain investor risk appetite on the domestic front.

ING Property Trust, Fisher & Paykel Healthcare and APN News paced gainers on the day.

The NZX 50 rose 5.4 points, or 0.2%, to 3084.5. Within the index 23 stocks rose, 16 fell and 11 were unchanged. Turnover was $72.6 million.

Asia Pacific markets rallied across the board on the back of better-than-expected manufacturing data from the US and China. Japan’s Nikkei was last trading 1.1% up at 9023.8, Hong Kong’s Hang Seng index was last up 1.3% at 20886.1 and Australia’s ASX 200 was last trading 0.7% higher at 4528.8.

“Our largest exposures are to Australia and increasingly to Asia, so slow-downs in America and to a lesser degree Europe don’t mean as much to us as we’re seen as tagging onto the lucky countries,” TOWER Asset Management's Paul Robertshawe said. “We’ve got a decent exchange rate with Australia, which opens that market to us, and we have an exposure into Asia through our commodities, predominantly food which is less volatile than metals and resources.”

ING Property (NZX: ING ) rose gained 2.9 percent to 70 cents. Fisher & Paykel Healthcare, (NZX: FPH ) rose 2.1% to $2.98, and mining company Pike River Coal (NZX: PRC ) rose 1.9 to $1.07.

APN News & Media (NZX: APN ) rose 2% to $2.50 after the company announced that it had bought Pacific Magazines’ key women’s’ titles.

APN will double its share of the womens’ magazine market in New Zealand to 41.6% of available readers, or 1.55 million people weekly, by adding the New Idea (12.3%) and That’s Life (7.6%) titles to its New Zealand Woman’s Weekly (21.5%), according to Nielsen ratings between July 2009 and June 2010.

Shares in takeover target NZ Farming Systems (NZX: NZS ) were unchanged at 70 cents after the South American dairy operator’s board recommended Olam International's takeover bid, which values the dairy farm developer at $171 million, or 70 cents a share.

Farming Systems' chairman John Parker said the increased offer, which is now in the independent adviser report's valuation range, and assurances that Singapore-based Olam will be able to provide funding helped sway them.

“Once the other bidder walked away from the table the chance of finding someone else to come up with a chunk of new capital was always going to be hard,” Robertshawe said.

Shares in New Zealand’s fourth biggest meat processor and exporter, Affco Holdings (NZX: AFF ), were unchanged at 36 cents, one cent below the offer price from Talley’s Group.

The bidder today said it had extended its offer deadline to minority shareholders to Oct. 8, but stressed it would not be raising its price.

Goodman Fielder (NZX: GFF ) fell 2.9% to $1.68, leading declines on the day.  Guinness Peat Group (NZX: GPG ) fell 2.4% to 62 cents, and jewellery retailer Michael Hill (NZX: MHI ) fell 1.5% to 67 cents.

Pyne Gould (NZX: PGC ) fell 2.4% to 41 cents after it announced that its Perpetual Group is in talks to acquire ASB Bank’s Aegis WRAP platform.

In a separate development today, Pyne Gould confirmed that a $100 million loan to South Canterbury Finance has been repaid following the finance company’s collapse into receivership.

Fonterra said that it had hired NZX to help design a platform for shareholders of the world’s biggest dairy exporter to trade stock amongst themselves.

The move to set up the platform comes after Fonterra’s shareholder-suppliers approved a ‘Trading Among Farmers’ concept in June that takes the redemption risk for the shares off Fonterra’s balance sheet and creates a closed market among the farmers.

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