MARKET CLOSE: NZX rallies with global response to EU moves

MARKET CLOSE: NZ stocks rally with global response to EU moves; AMP, Contact rise

Oct. 7 (BusinessDesk) – New Zealand shares ended the week on a high, joining a global rally on signs Europe is beginning to take steps to address its debt crisis. Australia’s S&P/ASX 200 Index rallied more strongly and Australian companies were among the biggest gainers on the NZX.

The NZX 50 Index rose 37.42, or 1.1%, to 3383.63. Within the index, 26 stocks rose, 11 fell and 13 were unchanged. Turnover was $99.7 million on a day when private retirement home operator Summerset Group set the price for the sell down of Quadrant Private Equity’s stake of almost 100% at the low end of its range.

Australia’s benchmark index rallied 2.3%, driven by energy and resource stocks and financials on optimism global growth won’t stumble and banks will cope with losses on euro debt.

“We’re following the world,” said Grant Williamson, a director at Hamilton Hindin Greene. “We’ve seen nice improvement in Europe and local investors are being pushed up” by gains in Australian stocks.

Investors are still being reasonably defensive, with a focus on leading stocks, he said.

AMP, the Australian wealth manager, gained 5% to $5.25. Westpac Banking Corp. rose 3.9% to $27 and Australia & New Zealand Banking Group gained 3.8% to $26.

Among major local companies, Fletcher Building, the biggest on the exchange, rose 0.9% to $7.88 and Contact Energy Ltd. climbed 1.6% to $5.64.

Williamson said the Summerset initial public offering was a reasonable result in the current market conditions.

“It had to be priced right for investors to support it and that’s exactly what happened,” he said.

Yet a number of investors may be holding back for bigger fish, with preliminary work on the Trade Me sell-down by Fairfax Media Group and the promise of state-owned energy companies and shares in Air New Zealand coming onto the market, he said. The SOE sell-off would be in the next term of parliament, assuming National wins.

OceanaGold rose with mineral companies in Australia, rising 4.7% to $3.10.

Fisher & Paykel Healthcare rose 1.6% to $2.59, the beneficiary of a kiwi dollar which while up today at 77.38 U.S. cents, is down from more than 83 cents last month. The company gets more than 50% of its revenue in U.S. dollars.

Energy World Corp. didn’t trade today and last changed hands at 63 cents in April. The company said today it will delist from the NZX as of Oct. 12 because of the lack of local interest and costs.

Today was the last trading day for Energy World shares in New Zealand. Its ASX-listed stock soared 13% to 52.5 Australian cents after the company said it was committed to a major LNG project in East Java. It previously hosed down reports its LNG venture in Papua New Guinea had fallen out of political favour there.

Nuplex Industries declined 2.5% to $2.70 and Vital Healthcare fell 1.8% to $1.12 after manager One Path back tracked on plans to sell out and internalise the contract.

(BusinessDesk)

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