MARKET CLOSE: NZ stocks rise to highest since May

MARKET CLOSE: NZ stocks rise to highest level since May; FPA, RAK and CAV lead gains

By Jason Krupp

Oct. 14 (BusinessDesk) - New Zealand stocks rose to the highest close since early May as a strong start to the third quarter earnings season in the U.S. stoked investors’ risk appetite and lifted equity markets across the globe. Manufacturers Fisher & Paykel Appliance Holdings, Rakon Ltd., and Cavalier Corp. led gains on the bourse.

The NZX 50 Index rose 30.78 points, or 0.9%, to 3,262.6. Within the index, 28 stocks rose, 14 fell and eight were unchanged. Turnover was $113.3 million.

Strong earnings from J.P. Morgan Chase and Intel Corp., which beat estimates, helped lift U.S. stocks to a fourth straight day of gains.

“We’ve had quite a reasonable performance with the lift in offshore markets bringing buyers back into the local marketplace,” said Grant Williamson, a director at Hamilton Hindin Greene. “Locally interest rates are likely to be kept down for bit longer and therefore investors are chasing yield in this market.”

F&P Appliances, the whiteware maker, rose 3.5% to 60 cents, leading gains on the NZX 50. Rakon, the manufacturer of crystal oscillators used in cellphones and GPS units, rose 3.3% to $1.27, and Cavalier, New Zealand’s only listed carpet maker, rose 2.7% to $3.05. Goodman Fielder Ltd., the good ingredient manufacturer, rose 2.3% to $1.82.

Telecom Corp., the country’s biggest telephone company, rose 3% to $2.08, Sky Network Television Ltd., the pay TV operator, rose 2.8% to $5.15, and Fletcher Building Ltd., New Zealand biggest construction company, rose 2.3% to $1.82.

Sanford was unchanged at $4.05 after the Commerce Commission said it will focus on the supply of mussels within New Zealand as part in its investigation into the fisheries company's application for clearance to buy the Pacifica Seafoods Group of companies.

The commission said that while the majority of these mussels appear to be exported, both Sanford and Pacifica supply their mussels in New Zealand and this supply is the focus of the commission's investigation.

NZ Farming Systems Uruguay Ltd., the South American dairy operator recently taken over by Singapore’s Olam International, fell 6.4% to 59 cents, leading declines on the NZX 50. The company announced that formally cut its ties to

PGG Wrightson Ltd. with exit costs exceeding $20 million. In August the company bought back its management contract from the rural services provider for $4 million. Wrightson shares were unchanged at 58 cents.

Property stocks continued to come under pressure after gaining for much of October. AMP NZ Office Trust, the prime office space investor, fell 2.5% to 78 cents, Kiwi Income Property Trust, the retail and mall investor, fell 1.9% to $1.03, and Property for Industry Ltd., the commercial and industrial property investor, fell 1.7% to $1.19.

Lyttelton Port Co., the South Island's biggest port, was unchanged at 2.25, and Port of Tauranga, New Zealand's largest export hub, fell 0.1% to $7.10 after Transport Minister Steven Joyce said the government will not interfere in rationalisation of the ports sector or help it pick and choose the ports which should prepare for international status.

New Zealand retail spending was unchanged in August, as households cut back on hardware and appliances purchases while stocking up on cars and fuel.

Total spending was unchanged in August, seasonally adjusted, after falling 0.4% in July, government figures showed. Economists in a Reuters survey expected a 0.4% gain. Core retail spending, which excludes spending on motor vehicle-related goods, fell 0.6% versus expectations for a 0.3% gain.

New Zealand manufacturing activity contracted for a second month in September though new orders recovered and employment stayed positive, which may signal an end to the gloom.

The BNZ-Business NZ Performance of Manufacturing Index fell to 49.2 in September, a 13-month low, from 49.3 in August. New orders rose to 50.3 after sinking to 47.7 in August, which was the lowest since May 2009.

(BusinessDesk)

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