MARKET CLOSE: NZ stock rise; Telecom paces gainers

MARKET CLOSE: NZ stock rise; Telecom paces gainers, Wrightson falls

By Jason Krupp

July 1 (BusinessDesk) - New Zealand stocks rose for a second session, helping the exchange snap a two-week streak of declines as fears of a European debt crisis abated. Telecom Corp. paced gainers, while PGG Wrightson Ltd. fell.

The NZX 50 Index rose 26.75 points today, or 0.8%, to 3,475, and gained 0.6% on the week. Within the index, 26 stocks rose, 13 fell, and 11 were unchanged. Turnover was $94.9 million.

"Small incremental gains from a number of players have been behind the index's performance on the day," said James Smalley, a client advisor at Hamilton Hindin Greene. With fear of a Greek default now receding "the next big focus of the market is on results season."

Telecom Corp., the country's biggest phone company, rose 2.4% to an 18-month high of $2.51. Interest in the stock growing as it prepares to break ground on the government's ultrafast broadband project towards the end of the year, Smalley said. The stock accounted for just under half of the volume traded today.

Goodman Fielder Ltd., the Australian food ingredients manufacturer, rose 3.7% to $1.40.

New Zealand property stocks, often sought after by investors chasing dividend yields, were a notable feature of the market today.

Property for Industry Ltd., the commercial and industrial property investor, rose 2.5% to $1.22. The stock has a gross dividend yield of 7%.

Goodman Property Trust, the listed property investment vehicle with a dividend yield of 8.2%, rose 2.1% to 97 cents.

Vector Ltd., the Auckland electricity and gas distributor which is also regarded by investors as a higher yielding investment, rose 2.4% to $2.60.

Auckland International Airport Ltd., the country's busiest gateway, today appointed Judy Nicholl as its new general manager aeronautical operations. She had been serving in the role in an acting capacity since April. The airport's shares rose 1.8% to $2.27.

Wrightson, the rural services firm, fell 2.1% to 47 cents, leading decliners on the exchange. The stock is rated as 'outperform' according to a consensus poll of four analysts compiled by Reuters, with a median target price of 53 cents.

Pyne Gould Corp., the financial services company, fell 2.5% to 39 cents after it said it will put up $14 million to refinance a related fund as it winds itself down.

PGC wants to make sure Equity Partners Infrastructure Company No.1 Ltd. has an orderly sell down of assets, and buying a stake in the National Australia Bank’s loan facility gave it better control to do that.

PGC will put up $7.5 million once the deal is secured, and $6.5 million by July 15, it said. If it doesn’t make the second tranche, EPIC may end up in breach of its facility.

Restaurant Brands NZ Ltd., the fast food chain operator, fell 2% to $2.47.

AMP Ltd., the Australian wealth manager, fell 1.6% to $6.25 with the stock still coming under selling pressure after it announced earlier this week that it 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.

Tower Ltd., the listed insurer controlled by Guinness Peat Group, fell 1.3% to $1.50 amid rising concerns over reinsurance costs in the wake of the Christchurch earthquakes. Last month the company said it expects the cost of reinsurance cover to lift expenses by as much as $31 million this year.

NZ Farming Systems Uruguay Ltd. was unchanged at 70 cents after Olam International Ltd., the Singaporean food group, failed to acquire the 90% stake it needs in the South American dairy operator to trigger compulsory acquisition of the remaining shares.

At the close of its offer period last month, Olam's second takeover offer for the company left it with an 85.93% controlling stake, having added just 7.6% of Farming Systems shares through the second offer and purchase of an additional 0.35% bought on the open market.

(BusinessDesk)

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