MARKET CLOSE: NZX 50 rises to new 2 ½-year high, led by MFT

MARKET CLOSE: NZX 50 rises to new 2 ½-year high, led by Mainfreight

By Jason Krupp

March 7 (BusinessDesk) - New Zealand stocks rose, pushing the NZX 50 Index to a new 2 ½-year high, as the weaker kiwi dollar helped spur international appetite for local equities. Mainfreight Ltd. led gainers after it announced its expansion into Europe, while Goodman Fielder Ltd. fell.

The NZX 50 Index rose 12.03 points, or 0.4%, to 3,430.14, the highest level since June 2008. Within the index, 22 stocks rose, 17 fell, and 11 were unchanged. Turnover was $ $152.7 million.

The New Zealand dollar was last trading at 73.70 U.S. cents, having slid from above 78 cents as recently as a month ago. The kiwi had come under pressure amid weaker economic indicators and the Feb. 22 earthquake which ravaged Christchurch. A decline in the currency makes local assets appear cheaper to overseas investors.

"People internationally have been wary of investing New Zealand because of the currency," said Shane Solly, portfolio manager for Mint Asset Management. "It is now moving back to levels that are more interesting."

Mainfreight, the trucking company, rose 5.8% to $8.59, a record high, after it announced that it would borrow up to 120 million euros to buy Netherlands-based Wim Bosman Group.

The New Zealand company will pay at least 110 million euros for the Dutch transport and logistics provider, with a further 10 million euro payment if it achieves an earnings target before interest, tax, depreciation and amortisation of 20 million euros this year. The acquisition, which is scheduled to be completed by April 1, will give Mainfreight a foothold in Europe.

"One of the good things about Mainfreight is that they have been very clear on their strategy for some time, and this is them implementing on it," Solly said. "They've got a track record of making investments that pay off in the medium term."

Hellaby Holdings, the diversified investment company, rose 2.4% to $2.15 after it announced it will help aggregate small shareholder parcels that make up 4.1% of its ownership.

The Auckland-based company will pay brokerage and registry costs in a small shareholder plan open to local investors with no more than 2,000 shares to cut administrative costs. That accounts for about 60% of the company’s shareholders, who collectively hold some 3 million shares.

Auckland International Airport Ltd. rose 0.9% to $2.28 after the nation’s biggest gateway reported that the number of international passengers increased by 4.8% in January, making up for a decline in domestic travellers that month.

The increase in international passenger movements to 687,996 from 656,380, excluding transits, in January was underpinned by short-haul traffic from across the Tasman and the Pacific Islands, and followed December’s 6.1% gain. The introduction of China Airlines’ new service also added to the international growth.

AMP Ltd., the Australian wealth manager, rose 0.1% to $7.35 after the Supreme Court of Victoria approved its A$13 billion merger with AXA Asia Pacific Holdings. The approval from the Australian court was the final regulatory hurdle the company needed to clear in order to complete its bid for the financial services company, having recently won over minority shareholders.

Xero Ltd., the online accounting software vendor, rose 4.4% to $2.62, after the company reiterated in a presentation to investors that it is on target to breakeven this calendar year.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, fell 3.7% to $1.57, leading decliners on the NZX 50.

Air New Zealand Ltd., the national carrier, fell 2.3% to $1.26 after it was named as one of eight airlines that didn’t advertise their airfares appropriately online.

The Australian Competition & Consumer Commission took the airline, along with Jetstar Airways Pty., Tiger Airways Australia Pty., Air Asia X, Malaysia Airlines System Bhd, LAN Airlines SA, American Airlines Inc., and Etihad Airways PJSC to task for not advertising the single total price for an airfare on their websites.

Solution Dynamics Ltd., the NZAX-listed software company, was unchanged at 30 cents after it announced plans to raise funds in a discounted rights offer after breaching a bank covenant.

The company wants to raise some $750,000 in a 1-for-3 pro rata renounceable rights issue at 20 cents a share to reduce its cash deficit. That’s a 33% discount to the current price. The shares have dropped 21% this year.

(BusinessDesk)

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