MARKET CLOSE: NZ shares rise; Kathmandu gains, RBD falls

MARKET CLOSE: NZ shares rise; Kathmandu paces gainers while Restaurant Brands falls

By Jason Krupp

Jan. 25 (BusinessDesk) - New Zealand shares rose for the second time in three sessions, as positive offshore leads help stoke investors' appetite for local stocks. Kathmandu Holdings paced gainers on the exchange while Restaurant Brands NZ Ltd. fell.

The NZX 50 Index rose 6.41 points, or 0.2%, to 3359.06. Within the index, 22 stocks rose, 13 fell, and 15 were unchanged. Turnover was $84 million.

Stocks on Wall Street rose for a second day, with the Standard & Poor's 500 Index closing 0.6% up at 1290.84, after chip-maker Intel Corp. announced a successful share buy-back plan, while packaging company Rock-Tenn Co. agreed to buy rival Smurfit-Stone Container Corp.

Kathmandu rose 2.9% to $2.16, the highest level in over six months.

Last week the outdoor clothing retailer upgraded its earnings forecast, with profit likely to rise by as much as 26% to between $18.5 million and $19.5 million for the six months ending Jan. 31 on the back of stronger earnings.

The stock was further boosted by the December BNZ BusinessNZ performance of service index, which showed a significant recovery in confidence among retailers, with rose to 56.9 in the month, up from 46.3 in November. A reading above 50 indicating activity is expanding, while a reading below 50 indicates contraction.

Air New Zealand Ltd., the national carrier which bought a 15% stake in Virgin Blue Holdings for $189.5m, rose 2.1% to $1.45.

Virgin today said it expects first half net profit to be down more than 50%, due to the floods, a slowdown in consumer spending and disruptions to the airline's check in system last September. It expects to post a net profit after tax of A$23 to A$26 million for the six months to December 31, down from A$62.5 million in the prior corresponding period of 2009.

"Air New Zealand's management recognise that the New Zealand aviation market is small and in order to expand and become a bigger player they have to look further afield," said Grant Williamson, a director at Hamilton Hindin Greene. "Investors are hoping that this go into the Australian market is going to be more success than last time."

Pyne Gould Corp. was unchanged at 36 cents after executives were rewarded with 4.4 million new shares in the financial services company as a thank-you for the merger of the firm's Marac unit with Southern Cross and Canterbury building societies.

The managers are getting shares equivalent to 0.5% of the company, at 36.74 cents each, worth $1.6 million, according to a statement from chairman Bruce Irvine. The gratuity will slice $1.4 million off Pyne Gould's 2011 profit and cut $300,000 from the earnings of the new merged entity, Building Society Holdings Ltd. this year and by $100,000 in 2012.

"I think this is a very strong incentive for directors and staff to perform, though some investors might view it as excessive," Williamson said.

Charlie's Group Ltd., the juice maker that extended its footprint in Australia's Cole supermarkets, was unchanged at 20 cents after beating sales forecasts by $900,000 in the second half of last year.

The company's sales hit $21.9 million in the six months ended December 31, beating the $21 million forecast, and 29% ahead of 2009's revenue.

Chief executive Stefan Lepionka said most of the growth came in Australia, where it broke into Coles last year, though New Zealand sales were also up 3.6% cent from the same period a year earlier. It kept forecast profit at $1 million for the period.

Restaurant Brands NZ Ltd., the fast food franchise operator, fell 2.8% to $2.44, pacing decliners on the NZX 50 for a second day.

The stock was second best performer on the NZX 50 last year, gaining 64% over the past 12-months, but has battled to find traction this year, and is now trading at its lowest level since October.

OceanaGold Corp., the gold miner, fell 2.2% to $3.60 after it announced that it was taking full control of mining at its Reefton Gold Mine from April 1, and with a significant increase in operations at the mine, situated on the outskirts of Greymouth.

Stracon Mining has been operating and maintaining OceanaGold's mining equipment fleet under an agreement at the operation since mining started in 2006.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, fell 0.6% to $1.73. The stock has regained some of the ground it shed after chief executive Peter Margin announced his resignation on Jan. 18, but still trading lower than $2 highs seen in November.

(BusinessDesk)

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