MARKET CLOSE: NZ stocks rise with jump in Telecom volume

MARKET CLOSE: NZ stocks rise, with jump in Telecom volume, MHI falls

By Jason Krupp

Jan. 21 (BusinessDesk) - New Zealand stocks rose for the first time in three sessions, with the biggest volume of Telecom Corp. shares trading so far this year. Michael Hill International Ltd. paced decliners.

The NZX 50 Index rose 13.43 points, or 0.4%, to 3352.72. Within the index 16 stocks rose, 15 fell, and 19 were unchanged. Turnover was a higher-than-average $108.2 million.

"Largely the leaders are what's taking us higher, with Telecom having quite a strong day and Contact rebounding off recent weakness," said James Lee, head of institutional equities for First NZ Capital.

Telecom, New Zealand biggest telephone company, rose 1.8% to $2.31, its highest level since February last year. Earlier this week the company revised its timeline to split into two businesses, a key requirement to participate in government's ultrafast broadband initiative, while it negotiates its exact role in the project with Crown Fibre Holdings.

The company, which is widely seen as the winning bidder by the market even though an official announcement is yet to be made, did not give a new separation date.

Contact Energy Ltd., the third biggest stock on the NZX 50, rose 1.1% to $6.30. The stock has gained 8.9% in value over the past three months.

Steel & Tube Holdings, the manufacturer of steel products used in the building industry, rose 2.7% to $2.27, pacing gainers on the exchange.

Westpac Banking Corp., New Zealand’s second-biggest lender by total assets, rose 1.4% to $29.40 after it said it was looking to raise up to 1 billion euros through a covered bond issue.

The deal follows a similar raising by Bank of New Zealand, with four investment banks given the mandate to manage the sale. The bank will test investor appetite for the sale when they go on a roadshow to meet European investors.

Michael Hill, the jewellery manufacturer and retailer, fell 2.2% to 89 cents, pacing decliners on the exchange. Durante Holdings, which represents the founding Hill family, is looking to buy a 5% stake in the company at 90 cents a share. If successful, the deal would give the family control over the company with a 50.2% shareholding.

Air New Zealand, the national carrier, fell 1.4% to $1.42 after the company made a A$145 million investment in a minority stake in new trans-Tasman partner Virgin Blue Holdings Ltd.

The airline paid an average 44 Australian cents a share offmarket for 14.99% of Virgin Blue, having last month won Australian and New Zealand regulatory approval to code share on the Tasman and connecting domestic flights, under an agreement that includes reciprocal frequent flyer and lounge access.

"It comes down to do you trust management to execute well, and Rob Fyfe is widely seen as one of the best CEOs out there," Lee said. "That said, New Zealanders do not typically back companies when they head overseas."

Fletcher Building Ltd., New Zealand's biggest construction company, fell 03% to $7.77 after takeover target Crane Group Ltd. posted a 15% gain in first-half profit and forecast a “strong” second half on demand for pipes and building materials. Net profit rose to A$18.2 million in the six months ended Dec. 31, from $15.9 million a year earlier, the Sydney-based company said in a statement. Sales rose 5.7% to A$986.7 million.

Crane this month rejected a revised A$9.35 cash and scrip takeover offer from Fletcher, which competes in the manufacture and supply of pipes and pipe systems in Australia and New Zealand. Fletcher is still seeking clearance for the deal, which is currently before the Commerce Commission and a spokesman was reported today as saying antitrust concerns may not derail the deal.

SkyCity Entertainment Group, the casino and hotel operator, fell 0.6% to $3.24.

(BusinessDesk)

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