MARKET CLOSE: NZ stocks join global rally

MARKET CLOSE: NZ stocks join global rally; Michael Hill, ANZ and NZX lead gains

By Jason Krupp

Oct. 6 (BusinessDesk) – New Zealand stocks rose for the third time in four sessions, joining a global rally on speculation other central banks would intervene to spur growth following Japan’s decision to cut interest rates. Michael Hill International Ltd., ANZ Banking Group and NZX Ltd. paced gainers on the day.

The NZX 50 Index rose 16.7 points, or 0.5%, to 3,235. Within the index, 26 stocks rose, six fell and 18 were unchanged. Turnover was $64 million.

Yesterday, the Bank of Japan unexpectedly cut interest rates to near zero and said it would buy as much as $60 billion of assets to keep the economy from faltering. Market across the region rallied on the news with Tokyo’s Nikkei up 1.6% to 9,671.8, Hong Kong’s Hang Seng index up 1.4% to 22,962.5, and Singapore’s Straits times Index was up 0.8% to 3,186.5. Australia’s S&P ASX 200 was up 1.8% to 4,690.8.

“Although we’re firmer, there hasn’t been a huge reaction to the very large improvements offshore, with Wall Street at a five-month high, and Australia up over 1.8%,” said Grant Williamson, a director at Hamilton Hindin Greene. “The economic jitters at home and signs that the recovery is taking longer than expected, that’s keeping investors from reacting as enthusiastically both on the positive and negative side.”

Michael Hill, the jewellery manufacturer and retailer, rose 3% to 68 cents, leading gains on the bourse. ANZ, the country’s biggest lender, rose4 2.8% to $31.34 on NZX, and was last 2.6% up at A$24.17 on the ASX, and NZX, the securities market operator, rose 2.6% to $1.60.

Air New Zealand Ltd., the national carrier, was unchanged at $1.29 after Canberra Airport said it would support the proposed alliance between the airline and Virgin Blue. In contrast, Wellington International Airport is opposed to the alliance, saying it will increase costs and reduce services. Virgin and Air NZ are in process of trying to overturn a draft ruling by Australian antitrust authorities which blocked the deal last month.

Warehouse Group, New Zealand’s biggest listed retailer, was unchanged at $3.95. Williamson said the stock had come in for some profit taking after a significant rise in value over the month of October. Earlier this week NZX, the securities market operator, queried the company on the sharp rise of its share price, after it rose to a seven-month high of $4 on Monday on a total of 167,222 stocks traded.

Pike River Coal, the coal miner, fell 1.8% to $1.10, pacing decliners on the NZX 50. AMP NZ Office Trust, the prime office space investor, fell 1.3% to 78 cents, and Freightways Ltd., the express package company, fell 15 to $2.99.

Auckland International Airport Ltd., the country’s busiest gateway, fell 1% to $2.06 after the New Zealand Shareholders' Association voiced its objection to the airport’s proposed 12.2%, increase in directors' fees, according to press reports. The rise, if approved by shareholders, will lift total remuneration for the eight AIA directors by $140,000 a year to $1.29 million.

OceanaGold Corp. fell 0.4% to $5 after the gold miner completed its C$115.5 million capital raising one day after it was announced. The company sold special warrants and ASX-listed shares at the equivalent price of C$3.50 a share, a discount of 9.1 percent from its price on the Toronto Stock Exchange.

Comvita Ltd., the medical honey products developer, fell 5.5% to $1.90 after the company turned to a first-half loss on legal costs relating to a patent infringement case in the UK, weaker sales and changes to New Zealand tax laws.

The net loss was $2.2 million for the six months to Sept. 30, down from a profit of $1.6 million for the same period last year.

Insured Group, the Australian insurer that joined the New Zealand stock exchange through a reverse listing, has been fined $7,500 and censured by the NZX disciplinary board for failing to have enough local directors on its board.

The firm, which used the shell of failed financier Lombard Group to get onto the bourse, only had one local representative on its board for a month and two days after being granted a three-month waiver as it completed its takeover. Shares were unchanged at 0.1 cents and last traded on September 10.

(BusinessDesk)

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