MARKET CLOSE Wednesday: NZ shares rally on SkyCity’s Adelaide plans, blue-chip buying

(BusinessDesk) - New Zealand shares rallied yesterday, pushing the NZX 50 Index back above 4000, as investors cheered SkyCity Entertainment Group's Adelaide expansion and broadly stronger offshore equity markets lifted demand for companies including Fletcher Building and Telecom.

The NZX 50 Index rose 43.75 points, or 1.1 percent, to 4023. Within the index, 36 stocks rose, eight fell, and six were unchanged. Turnover was a higher-than-average $188 million.

Shares rallied in the Europe, the US and on into Asia amid optimism American politicians will avert the fiscal cliff and as an upgrade to Greece's credit rating lifted sentiment.

SkyCity, the hotel and casino company, rose 4.7 percent to $3.79 after saying it will spend more than A$300 million redeveloping its Adelaide Casino following 2 ½ years of negotiations with the state government over the size of the operation, exclusivity and taxes.

"Investors like the announcement to redevelop the Adelaide casino," said Grant Williamson, a director at Hamilton Hindin Greene. "Investors think SkyCity are good managers and if they're prepared to invest that much into the project they must believe in it."

He said with gains in global equity markets "buyers are back in force" with buying across the blue chip stocks on the bourse.

Fletcher Building, the biggest company on the NZX 50, rose 2.1 percent to $8.27. Telecom, the largest phone company, gained 1.6 percent to $2.29.

Global transport and logistics firm Mainfreight rose 2.1 percent to $11.30 and Contact Energy gained 1.8 percent to $5.18. Port of Tauranga, the nation's busiest export port, rose 0.7 percent to $13.29 and Ryman Healthcare, the retirement village operator, rose 0.7 percent to $4.38.

PGG Wrightson, the nation's largest rural services company, jumped 5.3 percent to close at 40 cents, a level it last reached on April 20.

Williamson said Wrightson was one of his brokerage's top recommendations at the moment. "Investors can see there's some bullishness within that company," he said. "They're under new management, they've gone back to basics and they've started to talk about dividends again."

Among smaller stocks, Burger Fuel Worldwide jumped 10.7 percent to $1.55. The company, which is expanding by licensing its burger chain concept in the Middle East, said today it raised $2 million selling shares at a discount to funds run by Milford Asset Management.

"They seem to be doing pretty well in this early stage of development," Williamson said.

OceanaGold, operator of the Macraes gold field, fell 3.2 percent to $3.34, the biggest percentage decline on the NZX 50 today.

(BusinessDesk)