MARKET CLOSE: NZ shares gain for 2nd day; FBU up

MARKET CLOSE: NZ shares gain for second day; Fletcher, AIA, FPH rise

May 27 (BusinessWire) – New Zealand shares rose for a second day, led by Cavalier Corp., Fletcher Building Ltd. and Fisher & Paykel Healthcare amid perceptions the recent rout pushed prices down to levels that are relatively attractive.

The NZX 50 Index rose 10.81, or 0.4%, to 3022, rounding out the first back-to-back gains in at least a month. Within the index, 21 stocks rose, 23 fell and six were unchanged. Turnover was $76.6 million.

Fletcher, the nation’s biggest construction company, climbed 2.9% to $7.93. The shares have fallen from as high as $8.53 on April 15 and the RSI touched 18 on May 25.

Cavalier, the only carpet maker on the NZX after the demise of Feltex, rose 2.7% to $2.30, the second daily gains, having reached a 10-month low earlier this week. The stock’s relative strength index fell below 20, a level where some technical analysts say a security is poised to rise.

Companies continued to post mixed results.

Mainfreight Ltd., the nation’s biggest trucking firm, closed down 0.5% to $5.96 after reporting a 2.5% gain in profit on lower sales, reflecting cost cuts and a drop in one-time charges.

The company’s response was to manage costs, improve margins and “aggressively expand our market share,” managing director Don Braid said. Trading improved in the final quarter has carried through to the current period, he said.

Postie Plus Group rose 5.7% to 37 cents after the Christchurch-based clothing retailer said sales rose 4.3% in the third-quarter, putting it on track to lift full-year earnings.

Telecom Corp., which sank to a two-decade low close of $1.85 on May 25, rose 0.5% to $1.91 today. Chief executive Paul Reynolds told analysts at a briefing that the nation’s biggest phone company could be split into two listed firms giving shareholders exposure to the fortunes of both Telecom's retail business and its fibre business.

The phone company is cutting costs again, with its operating units ceding some authority back to head office to trim out duplication, Reynolds said.

Auckland International Airport rose 2.2% to $1.87 after Continental Airlines announced non-stop Boeing 787 flights to Auckland from its Houston hub starting on Nov. 16. Continental plans to mainly operate the route on a daily basis, it said.

Fisher & Paykel Healthcare rose 1.9% to $3.31. Chief executive Michael Daniell said the company stands to benefit from U.S President Barack Obama’s healthcare reforms, which would see 40 million more Americans being covered by medical insurance. “We see that as beneficial," he said, according to the NZ Herald.

NZ Farming Systems Uruguay led decliners, falling 4.4% to 44 cents.
Sanford Ltd., which yesterday posted a 79% drop in first-half profit, fell 4.3% to $4.27.

(BusinessWire)

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