MARKET CLOSE Kathmandu on a tear as NZ market drifts

Retailers dominated gainers on the NZX, with Kathmandu putting on a further 7 percent to close at $3.60 on a day when the market as a whole drifted up slightly.

The NZX 50 Index rose 1.345 points, or 0.03 percent to 4,770.215. Within the index, 20 stocks rose, 20 fell, and 10 were unchanged. Turnover was $127 million.

The three leading gainers on the day were outdoor pursuits retailer Kathmandu, which has had a strong run up from $2.85 on Sept. 23, the day before it delivered a 27 percent profit lift. The stock has risen 106 percent in the last 12 months.

Steel & Tube was the second main gainer, up 1.7 percent to $3, followed by Michael Hill International, up 1.4 percent to $1.45 after announcing it was changing financial reporting from New Zealand to Australian dollars.

New Zealand Oil & Gas initially gained before ending the day unchanged at 80 cents after an announcement this morning that its 35 percent partner in the Tui oil and gas field, Mitsui E&P Australia, had quit its stake, selling out to the remaining participants in the declining field: NZOG, AWE, and Pan Pacific Petroleum.

"It looks very favourable for the acquirers," said John Kidd, an energy analyst at Edison International Research. The US$14.9 million paid by the three for Mitsui's stake implied a value for the field of US$43 million.

"Analysts' reports I've seen would say it (the value of Tui) is quite a way north of that," he said.

Mitsui retains a 4 percent interest in the Kupe field.

Elsewhere, NZX held a teleconference for media with three of the five broking firms that have now produced research on the Meridian Energy float, with consensus emerging about a fair value for Meridian shares of around $1.80, the top end of the government's predicted range for the issue price.

All are identifying low rainfall and the Labour-Greens' central buyer policy to reform the electricity market and drop prices to consumers as the two biggest threats to Meridian, which is expected to be a yield rather than a capital growth stock.

"It's a dividend story," said Bruce Mackay of Edison International. "Meridian has a very high payout ratio compared to other listed power companies and New Zealand power companies have high payout ratios."

Leading declines today were Kiwi Income Property Trust, off 1.4 percent to $1.09 and Chorus, down 1.1 percent to $2.71.

(BusinessDesk)