MARKET CLOSE: NZ stocks gain, led by PGG Wrightson

MARKET CLOSE: NZ stocks gain, led by PGG Wrightson as NZS sale gathers pace

By Jason Krupp

July 28 (BusinessDesk) – New Zealand stocks rose for the fifth time in seven sessions, helped into positive territory by PGG Wrightson Ltd., which lead gainers on the bourse on the prospects of a windfall gain from the sale of its stake in NZ Farming Systems Uruguay Ltd.

The NZX 50 rose 13.7 points, or 0.5%, to 3022.18. Within the with index 22 shares rose, 14 fell and 14 were unchanged. Turnover was $76.9 million in a market that traders described as “mixed” and “just going through the motions” ahead of reporting season in New Zealand. The local earnings season kicks off at the end of this month.

Shares in Wrightson, New Zealand’s largest rural services company, rose 3.9% to 54 cents. The company is set to reap $15.5 million from the sale of its 11.5% holding in Farming Systems if Singapore's Olam International succeeds with its takeover offer at 55 cents a share. Shares in Farming Systems were unchanged at the offer price of 55 cents.

Separately, the company’s finance arm, Wrightson Finance, said it failed to get a quorum at a special meeting of bondholders to vote on extending the term of its October 2010 bonds for 12 months to the end of next year. It has $100 million of the bonds, which carry a coupon of 8.25 percent, and are currently set to mature on October 8, just inside the Crown guarantee. Wrightson Finance has been accepted for the extended guarantee which expires on Dec. 31 2011.

Miner Pike River Coal Ltd. rose 3.1% to $1, after Australia's Centennial Coal reported a 13% jump in third-quarter sales. Centennial has agreed to a A$2 billion takeover by Thailand's Banpu Plc, which has prompted speculation about a consolidation in the coal sector.

“Any takeover or speculation of a takeover like that is bound to filter through to stock in that industry,” said Chris Slater, a senior dealer with Direct Broking.

Steel & Tube Holdings, the steel products manufacturer, rose 2.3% to $2.20, Fisher & Paykel Appliances Holdings, the whiteware maker, rose 1.9% to 55 cents, and New Zealand’s largest phone company, Telecom Corp., rose 1.6% to $1.96.

Shares in Freightways Ltd., the express package company, rose 1.5% to $2.72 after the company announced that is had teamed up with auction site Trademe.co.nz and was launching a delivery service specifically for the site’s customers.

Shares in Scott Technology Ltd., the mining equipment manufacturer, were unchanged at $1.16 after the company announced that it expects to pay less than $1.5 million for the assets of a key supplier which will immediately contribute positively to earnings.

Michael Hill International Ltd., the jewellery manufacturer and retailer, fell 2.9% to 68 cents, pacing declines on the NZX 50.

NZX Ltd., the stock exchange operator, fell 2.7% to $1.46, AMP Ltd., the wealth manager, fell 1.5% to $6.51, and Warehouse Group Ltd., New Zealand’s biggest listed retailer, fell 1.4% to 3.55.

Fletcher Building Ltd., the largest company on the NZX, fell 0.8% to $7.68.

Direct Broking’s Slater said the company was coming under pressure in the Australia from competitors, and weaker building figures were weighing on the stock.

Abano Healthcare Group, the health clinic investor, rose 1.9% to $5.30 after the company posted a full-year operating net profit that met its guidance at $4.4 million and held off announcing a share buyback pending the possible sale of an associate company.

(BusinessDesk)

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