MARKET CLOSE: NZ shares rise on global rally

MARKET CLOSE: NZ shares rise on global rally

by Jason Krupp

Jan. 13 (BusinessDesk) - New Zealand shares rose to a 28-month high, after a strong rally on global equity markets in the wake of Portugal's successful bond auction stoked investor appetites for higher yielding assets. Michael Hill International Ltd. paced gainers on the exchange, while Abano Healthcare Group fell.

The NZX 50 Index rose 39.12 points, or 1.2%, to 3373.7. Within the index 30 stocks rose, eight fell, and 12 were unchanged. Turnover was $87.7 million.Last night Portugal sold 1.25 billion euros worth of debt at a yield of 6.72%, below the 7% level regarded as unsustainable, easing market fears that the European Union would have to bailout another of its member states.

"Debt issuance in Portugal went quite well so risk indicators toned down a bit," said Karl Williscroft, a trader with Direct Broking in Wellington. "People are finding a good entry point with the stocks."

Michael Hill, the jewellery manufacturer and retailer, rose 3.4% to 91 cents after boosting expected first-half earnings on the back of strong sales in the last three months of 2010, with growth strongest in Canadian and Australian stores.

The company said first-half earnings before interest and tax will probably be between $32 million and $34 million, an improvement on last year's reported $30.3 million.

Michael Hill lifted first-half sales 9.9% to $268.7 million. The upbeat mood saw healthy appetites for large cap New Zealand stocks, with Telecom Corp., the country's biggest telephone company, gaining 3.6% to $2.29, and Goodman Fielder Ltd., the food ingredient manufacturer, rising 3.6% to $1.75.

Dual-listed banking stocks also found support from investors. Australia New Zealand Banking Group, the country's biggest bank, rose 2.2% to $29.94, and Westpac Banking Corp., the Australian lender, rose 1.9% to $29.05.

Fletcher Building Ltd. rose 1.1% to $7.96. The country's biggest construction company, which launched a A$741 million hostile bid for Australia's Crane Group, said preliminary discussions with the takeover target's major shareholders indicate its offer will be accepted, according to a Reuters report.

Kiwifruit grower Satara Cooperative, which aborted a merger with EastPack due to the outbreak of a bacterial vine disease, has appointed Tom Wilson as managing director after he held the role for the past eight months on an interim basis. The shares last traded in October at $1.00.

Abano Healthcare Group, the specialist health clinic investor, fell 26.8% to $4.88, pacing decliners on the exchange. A quarter of its shares were cancelled under a planned arrangement with the NZX today after the company's share buyback and cancellation offer in November failed to attract sufficient support. The move is aimed at boosting earnings per share levels.

Xero Ltd., the cloud-based accounting platform provider, fell 3.5% to $2.80 after the company announced it had expanded its automated bank feed functionality to include feeds from more than 2,000 banks and financial institutions across the U.S. and Canada.

Automated feeds, which are already available to customers in Australia, New Zealand and the U.K., are the latest push by the company to make headway into the North American market, following a $4 million investment by PayPal founder Peter Thiel in October.

Hallenstein Glasson Holdings, the High Street clothing retailer, fell 0.7% to $4.15 after official statistics showed Kiwis kept a tight grip on their credit and debit cards this festive season, with shoppers spending less and making fewer purchases.

The seasonally adjusted number of electronic transactions fell 1.2% in December from a month earlier, according to Statistics New Zealand, with a 1.6% decline in core retail industries, which excludes motor-vehicle related purchases.The total value of transactions fell 1.2 per cent to a seasonally adjusted $5.05 billion, ending four months of gains.

(BusinessDesk) 18:00:16

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