Market close: Rise led by F&P Appliances – Telecom, Fletcher gain

BUSINESSDESK: New Zealand shares rose, led by Fisher & Paykel Appliances on expectation its biggest shareholder, China's Haier, will shortly make a takeover offer.

Telecom and Fletcher Building, the biggest companies on the bourse, were among gainers.

The NZX 50 Index rose 18.05 points, or 0.5%, to 3744.95. Within the index, 21 stocks rose, 17 fell and 12 were unchanged. Turnover was $108 million.

F&P Appliances rose 7.2% to $1.04, the highest since November 2008. AMP Capital Investors, which owns 5.2% of the whiteware firm, confirmed it has spoken to Haier about a possible takeover bid.

Haier owns almost 20% and yesterday indicated it may offer to buy the whole company.

"I don't think an announcement will be too far away," says Grant Williamson, director at Hamilton Hindin Greene. "Investors in New Zealand have built a good premium into the stock – the Chinese will have to offer a pretty nice premium to get investors interested."

Shares of Fletcher, New Zealand's largest listed company, rose 1.1% to $6.62. The Auckland-based company has concluded negotiations with the government on the $300 million design and build for south Auckland's new Wiri prison.

Telecom, the largest company on the NZX 50, rose 2.7% to $2.50. The stock offers a dividend yield of about 12%.

"Telecom is improving nicely again following the sell off after their result," Mr Williamson says. "Investors are buying for yield and it's a good yield stock."

Goodman Fielder, the Sydney-based food ingredients manufacturer whose brands include Edmonds baking products and Vogel's bread, rose 3.1% to 67 cents.

Pumpkin Patch, the children's clothing retailer, gained 2.6% to $1.19.

Xero, the cloud-based accounting platform provider, fell 1.2% to $4.86. The stock has gained about 81% this year. Diligent Board Member Services, which joined the NZX 50 alongside Xero in June, shed 0.8% to $3.90, having gained 103% this year.

"Xero is starting to become a volatile stock – it's trading on fundamentals," Mr Williamson says. "There are a lot of investors in there with nice gains wanting to take profits."

The decline was led by New Zealand Oil and Gas, down 2.17% to 90 cents. NZX, the stock exchange regulator, fell 1.83% to $1.07.

Metlifecare, the retirement village operator that merged with major shareholders Vision Senior Living and Private Life Care earlier this year, fell 0.4% to $2.85.

The Auckland-based company has sold its Ilam Park, Christchurch site to Bupa Care Services New Zealand for $9.4 million. The stock has gained about 26% this year.