MARKET CLOSE: NZ stocks rise on offshore sentiment

MARKET CLOSE: NZ stocks rise on offshore sentiment; shrugs off mixed Warehouse, Briscoe results

By Jason Krupp

Sept. 10 (BusinessDesk) – New Zealand stocks rose for the first time in three sessions, as positive sentiment from Asian markets helped investors shrug off mixed results from retailers Warehouse Group and Briscoe Group.

The NZX 50 rose 10.88 points, or 0.3%, to 3,162.7. Within the index 27 stocks rose, 15 fell and eight were unchanged. Turnover on the day was $57.3 million.
Asian stocks largely traded in positive territory as Japan boosted its estimate for second-quarter economic growth as well as a larger-than-expected fall in the number of U.S. jobless claims.

Japan’s Nikkei was last trading 1.1% up at 9200.54, Singapore’s Straits Times Index was up 0.3% and Korea’s KOSPI was 1% up at 1801.6.

“We’re ending the week largely up on the positive performance of overseas markets,” said Alan Moore, helps manage $600 million for Milford Asset Investors. “Sentiment is finely balanced though, and the market has been a bit disappointed by the mixed results we saw today from retailers.”

Warehouse Group, the biggest retailer on the NZX 50, rose 0.3% to $3.70. The company today posted a 2.3% decline in full-year earnings, before one-time items, on weaker sales of compact disks and DVDs.

Earnings fell to $83.2 million, missing the $84 million forecast in a Reuters survey as its profit margin shrank 90 basis points to 3.6%.

Briscoe Group, the household goods retailer, was unchanged at $1.25 after the company announced a 1.8% increase in first-half profit and said it faced tighter margins through the rest of 2010 as it looks to shore up its market share.

Guinness Peat Group, the U.K.-based investment company, rose 3.3% to 63 cents, jeweller Michael Hill rose 3% to 69 cents, and financial services firm Pyne Gould rose 2.4% to 42 cents.

NZ Farming Systems Uruguay Ltd., the South American dairy farm operator, rose 1.5% to 70 cents after saying Olam will contribute to the US$60 million cost of developing existing farms in South America as part of its takeover offer.
Separately, Farming Systems announced that former Fonterra executive Alastair de Raadt has been appointed chief executive until the end of January, with the option to extend the term by mutual agreement.

Telecom Corp., New Zealand’s largest telephone company, rose 1.5% to $2.05, having tumbled about 5% yesterday on the government's announcement that three competing regional broadband proposals would get priority over Telecom's nationwide plan.

The ball is now in Telecom's court to advance its alternative proposal to partner in the government's $1.5 billion urban UFB roll-out, say Communications Minister Steven Joyce and Crown Fibre Holdings Ltd. chairman Simon Allen.

Air New Zealand Ltd., the national carrier, ended the day up 0.8% to $1.27.
Australia’s antitrust regulator knocked back a bid by the airline and Virgin Blue to forge an alliance on trans-Tasman routes, and said the alliance would boost the likelihood of “coordinated conduct on routes”.

Allied Farmers Ltd. rose 26% to 3.4 cents after the company announced the early settlement of its Five Mile property near Queenstown Airport, which will cut its term debt facility with Westpac Banking Corp. to $5.4 million from $14.2 million. Debt will drop below $2 million as a result of its successful outcome of the MAC Reeves court hearing in California. Separately, the company more than doubled its loss this year after taking a $40.1 million hit on its failed finance unit and writing off another $20.2 million on the distressed Hanover and United loan books.

Pike River Coal Ltd., the coal miner, fell 4.6% to $1.05, pacing decliners on the day after managing director Gordon Ward announced that he was stepping down. Ward will leave the company at the end of the month.

Telstra Corp., the Australian telephone company, fell 4.2% to $3.59 and specialist medical device manufacturer Fisher & Paykel Healthcare Corp. fell 2.3% to $2.93.

(BusinessDesk)

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