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MARKET CLOSE: NZ shares rise in shaky pre-Xmas trading; Kathmandu bounces

Friday 23rd December 2011

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New Zealand shares rose in sleepy pre-Christmas trading punctuated by two strong earthquakes in Christchurch. Kathmandu regained some ground after shedding a quarter of its value yesterday. Comvita fell after Cerebos’s takeover offer lapsed.

The NZX 50 Index rose 8.26 points, or 0.3 percent, to 3215.505. Within the index, 25 stocks rose, 17 fell and eight were unchanged. Turnover was about $38 million, less than half its average daily trade last month, with many local market participants taking advantage of the reduced hours and long Christmas weekend to leave early.

The NZX 50 dipped twice this afternoon following two quakes near Christchurch and pared its gains at the close. There was some speculation in financial markets that the latest quakes would set back rebuilding efforts in the city by slowing insurance payouts and delay economic recovery, spurring the central bank to cut interest rates.

"The insurers have said they will not be paying up in full until they're confident that things are stable - this just tells them it's not," said Stephen Toplis, head of research at Bank of New Zealand. Still, it's "a postponement not a cancellation" and it is "grossly premature to start talking about interest rate cuts."

Tower, one of New Zealand’s largest general insurers, fell 3.2 percent to $1.50. Lyttelton Port fell 2.4 percent to $2.

Kathmandu climbed about 4.9 percent to $1.72, having tumbled 25 percent yesterday after the outdoor equipment maker said first-half earnings would fall in the face of a disappointing run up to Christmas.

Michael Hill International, the jewellery chain that counts Australia as its biggest market, fell 3.3 percent to 87 cents. Retailers in Australia have been marked down in the wake of surfwear chain Billabong’s profit warning.

Ebos Group rose 1.6 percent to $6.25 after the distributor of medical equipment and consumables agreed to buy Masterpet Group for $105 million plus debt from interest associated with Brent Wootton, expanding into animal health- products and pet food.

The deal is the largest ever for Ebos and will list sales and earnings in the 2013 year. Buying Wellington-based Masterpet will give it a suite of brands including Proctor & Gamble pet care, Eukanuba and IAMS pet food, and the Vitapet grocery brand.

Comvita fell 4 percent to $2,.40 after Cerebos’s $71.6 million takeover offer for Manuka honey products maker lapsed. The Singapore-based suitor had balked at the target’s independent valuation.

Turners & Growers was unchanged at $1.80 after Germany’s BayWa Aktiengesellschaft said it is willing to be the majority owner of fruit and vegetable marketing company after a rival horticultural firm emerged with enough shares of the target company to block a full takeover.

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