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MARKET CLOSE: NZ stocks rise; Rakon, AMP and Air NZ the leaders

Friday 23rd July 2010

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New Zealand stocks rose for the third time in four sessions, as a slew of positive corporate results on Wall Street helped bolster sentiment for equities worldwide. Rakon, AMP, and Air New Zealand led the market up.

The NZX 50 rose 13.54, or 0.5%, to 2994.9. Within the index, 26 stocks rose, 11 fell and 13 were unchanged. Turnover on the day was $70.1 million.

US stocks rallied after companies including UPS, Caterpillar and 3M posted sturdy earnings and raised their guidance. The Standard & Poor’s 500 Index climbed 2.3%.

“Markets around the world rallied on the positive results from the financial reporting season in the States, and we’re hoping the New Zealand reporting season is up there as well,” said Grant Williamson, a director at Hamilton Hindin Greene. “Local companies have cut their costs over the past two years, and this should flow onto the bottom line even if there is no movement on the top line.”

Rakon (NZX: RAK ) rose 3.2% to 98 cents, as the stock continued to reap the benefit of its acquisition of French rival Temex for 400,000 euros, announced yesterday.

Williamson said the purchase was minor in value terms but showed that the company was actively looking to develop products in different market segments, and the Temex buy should see benefits for investors in the medium to long term.

Auckland International Airport (NZX: AIA ) rose 2.1% to $1.96, on a rebound in passenger numbers from Asia.

Arrivals from Japan more than doubled, soaring 115% to 4,957 in June from a year earlier, visitors from China jumped 105% to 5,221 and guests from South Korea gained 34% to 3,582. Total international passengers climbed 5.5% to 553,769 in June from a year earlier, the company said in a statement to the NZX today. Domestic passengers rose 4.3% to 477,018. Total international passengers climbed 5.5%, and domestic passengers rose 4.3%.

Air New Zealand (NZX: AIR ) also rose on the passenger data, gaining 2.8% to $1.11.

“Like a lot of companies, the price has been reasonably weak and it is just rebounding on bargain hunting and the better news on visitor numbers,” Williamson said. “You should expect tourism related stocks like Air New Zealand to rally as we get closer to the Rugby World Cup.”

Xero (NZX: XRO ) surged 13 percent to $1.59 after announcing that internet entrepreneur Sam Morgan was increasing his stake to almost 5% and that customer numbers had grown to 22,000. It expects to break even in the second half of 2011.

AMP (NZX: AMP ) rose 3.1% to $6.65, on speculation that retirement products like KiwiSaver could be used to ease New Zealand’s unsustainable superannuation spending. AMP had 100,000 KiwiSaver members at the end of last year.

Pike River Coal (NZX: PRC ) rose 2.2& to 95 cents, and stock exchange operator NZX (NZX: NZX ). rose 2.1% to $1.49.

Pacing declines on the NZX 50, Pumpkin Patch (NZX: PPL ) fell 2.2% to $1.81, and AMP NZ Office Trust (NZX: APT ) fell 1.4% to 70 cents.

Lines company Vector (NZX: VCT ) fell 1% to $2.03 after it was rated an ‘underperform’ by First NZ Capital amid proposals to set regulated rates of return at levels the company claims ignore the tougher lending environment post-global financial crisis.

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