MARKET CLOSE: New Zealand stocks follow Aussie higher

MARKET CLOSE: New Zealand stocks follow Aussie higher; Goodman Fielder gains, APN falls

By Jason Krupp

March 25 (BusinessDesk) - New Zealand stocks rose for an eighth day, with the market taking its leading from Australia where investors are returning cautiously, amid signs the recent volatility is subsiding. Goodman Fielder Ltd. led gains, while APN News & Media Ltd. fell.

The NZX 50 Index rose 1.36 points, or 0.04%, to 3,388.6. Within the index, 23 stocks rose, 17 fell, and ten were unchanged. Turnover was $123.3 million. The S&P/ASX 200 index was up 0.8% to 4735.9 at the close of New Zealand trading.

"The Australian market has been lagging and people are just starting to come coming back, which is why we’re seeing some of the stocks listed over there doing better," said Shane Solly, a portfolio manager at Mint Asset Management. "The market and investors are still quite cautious of the international situation."

Goodman Fielder, the food ingredient manufacturer listed on the NZX and ASX, rose 3.2% to $1.63, leading the benchmark index for a second day. Westpac Banking Corp., the Australian lender, rose 2.1% to $32.47, and Telstra Corp., Australia's biggest phone company, rose 1.4% to $3.65.

Postie Plus Group, the clothing retailer whose chief financial officer departed last month, rose 3.7% to 28 cents after the company narrowed its first-half loss after increasing sales.

The Christchurch-based company made a loss of $750,000, or 1.87 cents a share, in the six months ended Jan. 30, compared to a loss of $1.1 million, or 2.79 cents, a year earlier. Sales rose 4.6% to $56.5 million.

Hallenstein Glasson Holdings, the clothing chain, rose 1.9% to $3.80. The company yesterday posted a 17% drop in first-half profit as 'intense' competition for women's apparel forced it to cut prices to maintain sales. Profit fell to $7. 1 million, or 11.96 cents a share, in the six months ended Feb. 1, from $8.5 million, or 14.33 cents a year earlier, the company said in a statement.

Fletcher Building, the country's biggest construction firm, rose 0.9% to $9.02, its highest level in more than two years, with the company continuing to incrementally building up its shareholding in takeover target Crane Group.

The company looks set to achieve its original aim of gaining 90% in the Australian pipe-maker, with a week to go before its offer expires and 81.9% of the company's stocking already under its control. Once it hits 90%, it can enforce a mandatory takeover.

Fletcher today issued 27 million new shares as part of its A$10.07 cash and scrip offer for each Crane share. The offer consists of one Fletcher share, A$3.50 in cash, and an A$0.50 per share fully franked special dividend.

Scott Technology Ltd., which secured government funding for meat and food industry process development, was unchanged at $1.42 after it lifted first-half profit 61%, while saying it is looking at ways to expand.

The Dunedin-based company made a profit of $1.6 million, or 5 cents a share, in the six months ended Feb. 28, up from $970,000, or 3.4 cents, a year earlier.

Sales rose 7.2% to $21.8 million as the production line manufacturer attracted strong demand in North America and in Australia. It flagged more growth will be likely in the second half of the year, with forward work at record levels.

APN, the dual-listed Australian media company, fell 2% to $2.01, leading decliners on the NZX50. The stock’s value has fallen 10.6% this week after the APN announced the Queensland floods and Christchurch’s earthquake will shave about A$9 million from first quarter earnings. The company doesn’t publish quarterly numbers and gave no context for the A$9 million figure. First-half EBIT was A$87 million last year.

F&P Healthcare Corp., the manufacturer of breathing masks and respirators, fell 0.6% to $3.12, with the resurgent strength of the New Zealand dollar weighing on the stock.

Overnight the kiwi broke through the 75 US cents level, and was last trading at 74.94 cents, having recouped almost all the ground it lost in the wake of the Feb. 22 earthquake in Christchurch.

FPH generates over 80% of its sales offshore, and a strong currency is likely to diminish the appeal of its products overseas.

Allied Farmers Ltd., the company which failed to transform itself in a major lender, fell 7.7% to 1.2 cents after it said it may need to write down the value of a $23 million loan over a Rodney property development.

It holds a second mortgage over undeveloped land at Silverdale, and has been informed by Honk 2 Ltd.’s Asian banking syndicate that the developer is expected to default. Honk 2 is an investment vehicle for developers Andrew Tauber and Paul Webb, who weren’t immediately available for comment.

At today's price, the company is now valued at just $24.5 million.

(BusinessDesk)

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