MARKET CLOSE: NZ stocks rise, Tower paces gainers on AMI bid

MARKET CLOSE: NZ stocks rise as Tower paces gainers on AMI bid

By Jason Krupp

June 28 (BusinessDesk) - New Zealand stocks crept higher with insurer Tower Ltd. pacing gainers amid speculation it’s poised to make a bid for AMI Insurance Ltd. Kathmandu Holdings was the biggest decliner on the day.

The NZX 50 Index rose 2.92 points, or 0.1%, to 3,441. Within the index, 27 stocks rose, 17 fell, and six were unchanged. Turnover was $103.5 million.

"We seem to be following a pattern of late where we fizzle at the end of the day," said Alan Moore, who manages $600 million at Milford Asset Management. "We haven't been helped by the fact that it's the end of the financial year for Australian investors."

Tower general manager Rob Flannagan told Fairfax Media report as saying the company was still in the process of valuing AMI's non-Christchurch assets, after which it was likely to a bid for the beleaguered insurer. The stock rose 3.9% to $1.62 and is currently in play, with controlling shareholder Guinness Peat Group looking to exit its holding as it winds itself down. GPG’s shares slipped 0.6% to 79 cents.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, rose 4.6% to $1.37.

Methven Ltd., the tapware manufacturer, rose 3.5% to $1.50, after yesterday flagging it expects to lift net profit by at least 25% to $8.5 million for the year ending March 31, 2012.

Financial services firm AMP Ltd. expects to pay about A$30 million in legal, finance and investment bank costs over its A$13.3 billion cash-and-scrip takeover of rival Axa Asia Pacific Holdings. The costs weren’t part of the merger integration budget. The shares rose 1.5% to $6.15.

Kathmandu, the outdoor clothing and equipment retailer, fell 3% to $2.23, leading decliners on the exchange. The stock is rated as 'outperform' according a consensus poll of 12 analysts compiled by Reuters.

Nuplex Industries Ltd., the industrial chemicals and resins maker, fell 2.7% to $2.94 after international rival Akzo Nobel NV issued a profit warning today, sparking fears that the sector may be facing tough times ahead. Akzo, the Dutch chemicals supplier, cited a 20% increase in the price of raw materials and the ongoing weakness in mature markets as some of the reasons behind its gloomier outlook.

PGG Wrightson Ltd., the rural services company, fell 2% to 48 cents, after shareholders approved the sale of its finance unit to Heartland New Zealand Ltd. for $100 million. Heartland will take on $352 million of debt in listed bonds and debentures for the loan book valued at between $400 million and $430 million.

Wrightson will carve out $96.5 million of non-performing loans into a special purpose unit to refinance or realise those assets in the short- to medium-term. It will also provide a $30 million guarantee on certain assets sold to Heartland. Heartland shares fell 1.4% to 48 cents.

Colostrum-based health tonics maker New Image Group has flagged weaker profit this year on a new mix of its business. The Auckland-based company has been developing a second revenue stream based on infant formula, and has already secured contracts with Hong Kong’s Natural Dairy NZ Holdings and Kiaora New Zealand International. The shares fell 7.7% to 24 cents in trading today.

NZ Farming Systems Uruguay Ltd., the South American dairy farm manager, today said it may return to profit earlier than forecast on higher-than-expected milk prices. The company, which is facing a full takeover bid from majority owner Olam International Ltd., expects to post a net profit of US$2.9 million in the 2012 financial year, it said in a statement. Farming Systems previously flagged a loss of US$1.9 million. Earnings before interest tax are forecast at US$8.9 million, up from US$3.3 million. The shares fell 2.8% to 70 cents.

(BusinessDesk)

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