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Market close: NZX 50 gains a second day, Telecom, Pike rise

Monday 20th October 2008

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New Zealand stocks rose for a second day as investors deemed some companies had tumbled enough to represent better value in a market where the central bank is set to slash interest rates. The NZX 50 Index rose 81.155, or 2.9%, to 2889.92. Turnover was about NZ$64 million, less than the average NZ$100 million seen in more normal times. Stocks in the U.S. fell on Friday though for the week, the Dow Jones Industrial Average gained 4.8%. In Asia today, the Nikkei 225 Index was up 3% in midday trading and Hong Kong’s Hang Seng Index had risen about 4.3%. Australia’s S&P/ASX 200 Index rose 3.8% in late afternoon trading, led by Alumina Ltd., AXA Asia Pacific, Santos and National Australia Bank. “A lot of stocks have been heavily oversold,” said Barry Lindsay, research manager at First NZ Capital. “The market’s got to find a bottom at some point. An easing in monetary conditions is always a positive.” Telecom Corp. led the gains, rising 6.8% to NZ$2.50 and extending its rebound from a record low last week. The stock is still down 45% this year. Pike River Coal rose after reporting Friday that it had reached coal after tunneling for two years in its South Island mine. Pike River reached its goal with only minor delays, even after drilling through a fault-line. “The development risk has now been eliminated,” Lindsay said. Steel & Tube Holdings weighed the index down, plunging 22% to NZ$2.82 after Australia’s OneSteel on Friday abandoned a NZ$4 a share takeover, citing market turmoil and New Zealand’s recession. PGG Wrightson Ltd. rose 5.8% to NZ$1.84, climbing back to about the level it had agreed to sell new shares at before abandoning the plan because of glitches with its bank financing. Silver Fern Farms has handed responsibility for livestock procurement to Wrightson even though the rural services company wasn’t able to settle its purchase of a half stake in the meat processor, the Sunday Star Times reported. The central bank will cut the official cash rate by 100 basis points to 6.5% on Thursday, according to the consensus estimate in a Reuters survey. The bank is poised to cut rates to revive an economy which some economists say may extend its recession to four quarters in a row. “There are now very clear indications that the economy is coming under substantially greater pressure than had been anticipated,” said Stephen Toplis, head of research at Bank of New Zealand. Fisher & Paykel Healthcare rose 5% to NZ$3.15 and has gained more than 30% in the past three months. The shares are rated a “buy” by five of eight analysts who follow the stock. Pretax earnings may almost double between 2009 and 2011 to NZ$153.5 million, according to Reuters estimates. The company “is well regarded,” Lindsay said. “If people sense the market conditions are getting a bit better then they’ll buy it again.” Nuplex Industries fell about 4% to NZ$5.10 after the resins manufacturer said a fire had closed its manufacturing plant in Bien Hoa, Vietnam. Damage may amount to US$2 million and the plant is insured, it said today. Customers will be supplied from other factories while repairs are made. It may take six months to restart production.

(Businesswire.co.nz)

 

 

NZ Top 50 2,889.920 +21.748 (+0.76%)
ASX 200 4,142.300 +171.500 (+4.32%)
Dow 8,852.22 -127.04 (-1.41%)
Nasdaq 1,711.29 -6.42 (-0.37%)
FTSE 100 4,063.01 +201.62 (+5.22%)
Last updated: 20/10/2008 5:09pm
AIA 1.83 +0.10
AIR 0.84 +0.01
AMP 7.00 +0.30
ANZ 19.60 +0.40
APN 3.30 -0.23
APT 1.06 0.00
CAV 2.48 0.00
CEN 7.30 +0.24
EBO 4.30 +0.05
FBU 6.21 +0.23
FPA 1.32 -0.02
FPH 3.15 +0.15
FRE 3.12 -0.01
GFF 1.64 +0.02
GMT 1.10 +0.01
GPG 0.99 +0.03
HLG 2.52 0.00
IFT 2.04 +0.04
IMP 1.10 0.00
ING 0.63 0.00
KIP 1.11 +0.01
LNN 9.65 -0.05
MFT 5.66 +0.30
MHI 0.67 -0.02
MVN 1.27 -0.03
NPX 5.10 -0.21
NZO 1.08 0.00
NZR 6.00 0.00
NZS 1.13 -0.01
NZX 6.00 +0.07
PFI 1.13 +0.02
PGW 1.84 +0.10
POT 6.40 -0.15
PPL 1.11 -0.03
PRC 1.43 +0.07
RAK 2.04 -0.17
RYM 1.55 +0.08
SAN 5.41 +0.06
SKC 3.32 +0.17
SKL 0.78 0.00
SKT 3.90 0.00
STU 2.82 -0.78
TEL 2.50 +0.16
THL 1.07 0.00
TLS 4.70 +0.20
TPW 7.20 +0.20
TWR 1.35 0.00
VCT 2.03 -0.02
WBC 25.39 +0.39
WHS 3.87 0.00

 

 

 

 

 

 



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