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MARKET CLOSE: NZ shares rise to 7-month high


Guinness Peat, Tower among gainers; Telecom hits a post de-merger high.

BusinessDesk
Tue, 06 Mar 2012

New Zealand shares rose, led by Guinness Peat Group as investors speculated on when the investment group will divest its stake in insurance group Tower. Pumpkin Patch rose after the children's clothing retailer announced global expansion plans.

The NZX 50 Index rose 13.99 points, or 0.4 percent, to 3401.83, the highest close since early August. Within the index, 28 stocks rose, 18 fell and four were unchanged. Turnover was $124 million.

GPG rose 5.4 percent to 48 cents and has dropped 17 percent this year. The company is winding down its portfolio to return funds to shareholders. Its 35 percent stake in Tower stock is worth $158 million at today's price. Tower rose 3.7 percent to $1.70.

"Tower has been quite strong over the last week or so," Craig Brown, senior investment analyst at One Path New Zealand. "GPG still looking for options for Tower and that could be something to do with it."

Pumpkin Patch rose 2.5 percent to 83 cents. The retailer said today it has signed an agreement to sell its products through Mexico’s leading department store, Liverpool. The company also announced plans to ramp up distribution in the Middle East.

The retailer has signed a distribution agreement with Liverpool to sell Pumpkin Patch products in 24 of its 79 stores this year. Separately, the company’s Middle East partner, Jawad Business Group, will sell its Charlie & Me products in 25 stand-alone stores across the region over the next 12 months.

"The Jawad business is well established and will perform well as a wholesale partner it is an encouraging sign," Brown said. "It appears to be a rational and logical move to pursue."

Fisher & Paykel Appliances, whose overseas sales of appliances are sensitive to currency fluctuations, rose 3.7 percent to 42 cents as the kiwi dollar fell.

The New Zealand dollar touched a month-low of 81.38 US cents, extending its slide since China lowered its economic growth target to 7.5 percent.

Fletcher Building, the nation's biggest construction company, fell 2.8 percent to $6.66, having closed at a five-month high yesterday. Investors are divided into those frustrated at the lack of progress on rebuilding Christchurch in the short-term and those that see longer-term growth.

Telecom rose 3.7 percent to $2.27, the highest since the company spun off its Chorus network business last year. Last month the company posted first-half earnings before interest, tax, amortisation and depreciation of $488 million, little changed from a year earlier.

"Now that the result is out gives us a base level for earnings," One Path's Brown said. "People can start to form a view where earnings are going."

About 21 million shares changed hands today, making it the busiest stock on the NZX 50. The stock is rated a 'hold' based on a Reuters survey, with a price target of $2.30.

Carpet maker Cavalier was the biggest decliner, falling 5 percent to $2.09.

Port of Tauranga, which has won business off stroke-bound rival Ports of Auckland, fell 1.3 percent from a record high to $11.25.

BusinessDesk
Tue, 06 Mar 2012
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MARKET CLOSE: NZ shares rise to 7-month high
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