MARKET CLOSE: NZ stocks rise; NZX leads gainers

MARKET CLOSE: NZ stocks rise; NZX leads gainers, Wrightson falls

By Jason Krupp

July 20 (BusinessDesk) - New Zealand stocks rose, with the exchange joining a global rally in equities. NZX Ltd. led gainers, and PGG Wrightson Ltd. fell.

The NZX 50 Index rose 16.34 points, or 0.5%, to 3,408.37. Within the index, 26 stocks rose, 12 fell, and 12 were unchanged. Turnover was $101.06 million.

The tone on regional markets was set by a rally on Wall Street, where stocks gained on the back of corporate earnings and progress on agreement to lift the U.S. debt ceiling ahead of a Aug. 2 deadline. In afternoon trade, Australia's S&P/ASX 200 Index rose 1.6% to 4,541.8, Japan's Nikkei 225 Index rose 1% to 9,991.51, and Hong Kong's Hang Seng Index rose 0.1% to 21,924.34.

"We're going through a bit of a relief rally on the indications that Obama and the Republicans will reach a deal on the debt ceiling," said Alan Moore, who helps manage $600 million in equities for Milford Asset Management Ltd. "It's taken away some of the threat from Moody's and Standard & Poor's that the U.S. could lose its triple-A rating."

NZX, the securities market operator, rose 4.7% to $2.22, snapping a slide which started late last week when the Financial Markets Authority said it would look into the company's seemingly contradictory disclosures on the performance of its Clear grain exchange.

The FMA's decision prompted the company to publish the results of a snap KPMG audit of the grain exchange platform on Tuesday, which showed the company will not have to take an impairment change to its Clear business.

"The initial reaction was a bit over the top," Moore said. "It's been sold down too far and it's not logical when related to the value of the grain exchange relative to the size of the operation."

Consumer stocks were a major focus for investors on the market today, with high levels of interest in retail and food service companies.

Restaurant Brands NZ Ltd., the fast food franchise operator, rose 3.9% to $2.43. Pumpkin Patch Ltd., the children's clothing chain, rose 2.9% to $1.06.
Fisher & Paykel Appliances Holdings, the whiteware manufacturer, rose 2.5% to 62 cents. Kathmandu Holdings, the outdoor clothing and equipment chain, rose 2.4% to $2.13.

Heartland New Zealand Ltd., the financial services company looking to transform itself into a bank, rose 3.3% to 63 cents.

The company yesterday announced it lifted its capital raising to buy PGG Wrightson Finance Ltd. to $58 million, with $35 million still to be raised from existing shareholders via a share purchase plan.

The sale is underwritten by Pyne Gould Corp. for $10 million and by Impact Capital Management, a private company representing Tomlinson family interests, the company said.

Wakefield Health Ltd., the private hospital investor, was unchanged at $5.30 after it formally launched another takeover bid for Norfolk Investments.

The offer of $3.80 per share for Norfolk, which owns 60% of the Grace Hospital in Tauranga, is subject to Wakefield gaining more than 50% acceptances by Aug. 18 and to the businesses of Norfolk and Grace Hospital continuing as normal. The offer values Norfolk at $24.2 million.

NZAX-listed gold miner Glass Earth Gold Ltd. was unchanged at 62 cents after it said it plans to launch a new drilling campaign based on "significant" results from surface channel sampling at its Muirs gold prospect, south of Tauranga.

Wrightson, the rural services company, fell 2% to 48 cents, leading decliners on the exchange. The stock is rated as 'hold' according to a consensus poll of five analysts compiled by Reuters, with a median target price of 54 cents.

APN News & Media Ltd., the publisher of the New Zealand Herald newspaper, fell 1.9% to $1.52.

New Zealand Refining Co., the country's only oil refinery, fell 0.9% to $3.53.

Vector Ltd., the Auckland electricity and gas supplier, fell 1.2% to $2.39, on concern it would be one of the losers under the Commerce Commission's draft decision to reset regulatory controls for 16 electricity distribution businesses from 2012-2015.

The scheme looks to reshape the pricing landscape to balance returns among providers, maintain consumer costs, while still seeking to foster infrastructure investment incentives.

(BusinessDesk)

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