MARKET CLOSE: NZ shares gain from 5-week low; Telecom rises

MARKET CLOSE: NZ shares gain from 5-week low; Telecom, Chorus, Fletcher rise

May 22 (BusinessDesk) - New Zealand shares rose, pushing the NZX 50 Index up from a five-week low, paced by Telecom, Chorus and Fletcher Building as optimism for a return to growth in Europe and China lifted equity markets throughout the region.

The NZX 50 rose 36.47 points, or 1.04 percent, to 3529.85. Within the index, 29 stocks rose, 12 fell and nine were unchanged. Turnover was $136 million.

Japan's Nikkei 225 Index and Hong Kong's Hang Seng were both up about 1 percent in early afternoon trading, following gains on Wall Street after leaders of the Group of Seven nations urged Greece to remain in the euro-zone while Chinese Premier Wen Jiabao said Beijing will have a bigger focus on economic growth.

Telecom, the biggest company on the New Zealand exchange, rose 3.5 percent to $2.64 and has climbed by more than a fifth this year. The stock has a dividend yield of 11.8 percent, making it relatively attractive versus fixed-income assets. Chorus, the network company spun off from telecom in November, gained 1.6 percent to $3.20 ahead of presentations to investors scheduled for tomorrow.

"The buying interest is certainty back" for Telecom, said Craig Brown, senior investment analyst at One Path New Zealand. Chorus's investor day "will give people a look under the hood of the company."

Fletcher Building, the nation's biggest construction group, rose 1.8 percent to $6.38. Contact Energy, the biggest power company on the NZX 50, rose 0.4 percent to $4.86.

PGG Wrightson, the nation's biggest rural services company, was unchanged at 32 cents after Fonterra Cooperative Group, the world’s largest exporter of dairy products, cut its forecast 2012 milk price and flagged lower payments in 2013 in response to a slide in global prices for dairy commodities.

Pharmacybrands jumped 13 percent to 86 cents after the retail pharmacy and medical centre company posted a 93 percent increase in full-year profit, reflecting the boost to sales from the acquisition of the Radius Pharmacy and Radius Medical businesses.

Sanford, the fishing company, fell 1.2 percent to $4.05 after the government announced that foreign-flagged fishing vessels will be required to register under the New Zealand flag within four years under a policy aimed at addressing the mistreatment and underpayment of crews working on some boats.

Sanford said it was too early to assess the impact of the government's decision, which will also have to be considered by "current vessel owners to determine the effect and their willingness to allow the vessels to be reflagged."

Skellerup, the rubber goods and milking equipment manufacturer, rose 4.2 percent to $1.49, leading the NZX 50 higher. Freightways rose 4 percent to $3.89 and NZ Refining gained 3.9 percent to $2.70.

Warehouse Group, the biggest retailer on the exchange, rose about 2 percent to $2.61.

(BusinessDesk)

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