MARKET CLOSE: NZ stocks rise, halts 11-day decline

MARKET CLOSE: NZ stocks rise, Aust govt pares back proposed mining tax

By Jason Krupp

July 2 (BusinessDesk) – New Zealand stocks rose, ending the week in the black after declining for 11 consecutive days, buoyed by Australian markets where corporate tax cuts have pushed the equities into positive territory. New Zealand Refining Co., NZX Ltd. and Nuplex Industries Ltd. lead gainers on the day.

The NZX 50 rose 4.29, or 0.2%, to 2938.1 points. Within the index 19 stocks rose, 19 fell and 12 were unchanged. Turnover was $41.1 million.

The ASX 200 Index was last trading 0.1% up at 4,241.7, after the Australian government agreed to shelve a plan to implement a resource tax in favour of cutting corporate tax to 29% instead of 28% included in the initial proposal.

“The changes to the corporate tax structures in Australia have put a bit of a positive spin on things,” said Guy Ellife, who manages $1.1 billion of equities at AMP Capital Investors. “Resource stocks are also up, but not a lot, with there is still a lot of uncertainty around global markets.”

Investors on Wall Street and in Europe will be closely watching US employment data, with June’s non-farm payrolls forecast to fall by 130,000.

Elliffe cautioned that the outlook for the market was set for “higher volatility.”

“The valuations out there seem reasonable to us at the moment but there are some earning risks, things tend to get a bit choppy,” Eliffe said. “This is not a market to be heroic in, just stick to the fundamentals.”

Shares in NZ Refining rose 5.2% to $3.05 and Nuplex Industries rose 2.5% to $2.84. NZX rose 2.8% to $1.46 on the back of news that the stock exchange would be increasing its fees and implementing more rules across the board. The move brings it in line with other stock market operators such as ASX and London Stock Exchange, though it hasn’t been embraced by the local investing community.

Property investor ING Property Trust lead decliners on the NZX 50, falling 2.9% to 66 cents. Telstra Corp., the dual-telecommunications company, listed fell 2.5% to $3.85 and PGG Wrightson Ltd., the rural services firm, fell 2% to 48 cents.

Shares in Allied Farmers, the financier that bought the Hanover and United loan books, fell 5.1% to 3.7 cents. Yesterday the company received an extension to its banking facility as it continues to negotiate with Westpac Banking Corp.

Pyne Gould Corp was unchanged at 38 cents after the company appointed a project manager to oversee its proposed merger to create a South Island bank with Canterbury Building Society and Southern Cross Building Society. Shares in CBS were unchanged at $2.80.

Mercer Group was unchanged at 25 cents. The stainless steel products manufacturer part-owned by Allan Hubbard, earlier announced that it had shuffled its debt away from embattled financier South Canterbury Finance and to another related party, Gresham Finance Ltd.

Shares in Postie Plus Group, the Christchurch-based clothing retailer, were unchanged at 32 cents after the company announced that sales had tapered off in May and June after a surge in the first four months of the year.

(BusinessDesk)

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