Article – BusinessDesk
May 31 (BusinessDesk) – New Zealand shares rose, pushing the NZX 50 Index to a week-high, as Mainfreight extended gains after posting record earnings yesterday and Pumpkin Patch named veteran retailing executive and investor Rod Duke to its …
MARKET CLOSE: NZ shares rise; Pumpkin Patch, Mainfreight advance
May 31 (BusinessDesk) – New Zealand shares rose, pushing the NZX 50 Index to a week-high, as Mainfreight extended gains after posting record earnings yesterday and Pumpkin Patch named veteran retailing executive and investor Rod Duke to its board.
The NZX 50 rose 6.94 points, or 0.2 percent, to 3488.28. Within the index, 19 stocks rose, 19 fell and 12 were unchanged. Turnover was about $115 million.
Mainfreight, the biggest road transport company on the bourse, rose 1 percent to $9.86, adding to its 3.2 percent gain yesterday, when it reported annual profit more than tripled to $80.5 million while sales climbed 35 percent to $1.81 billion, driven by trading in New Zealand and Australia.
“Mainfreight is continuing to see some good support,” said Grant Williamson, director at Hamilton Hindin Greene. “Investors are starting to realise that the share price is not expensive – we could see that stock break $10.”
Abano Healthcare, which invests in medical clinics, rose 4.7 percent to $4.20 after agreeing to sell its brain injury rehabilitation business. While the price wasn’t disclosed, the company said the price was above book value.
Pumpkin Patch, the children’s clothing chain, rose 2.3 percent to 88 cents after naming Briscoe’s Duke as one of two new board appointments.
Briscoe’s shares rose 0.6 percent to $1.82 and have gained 21 percent in the past year. The home wares and sporting goods retailer posted a record 27 percent increase in full-year profit to $27.5 million in March. Shares in Pumpkin Patch have tumbled 28 percent in the past 12 months as the company was forced to wind down its UK and US operations after stores failed to make acceptable returns.
“I think it’s a positive from Pumpkin Patch’s point of view,” Williamson said. “Duke has a good reputation – we have seen what he has done with Briscoe’s. I think it will go down well with investors.”
NZ Refining, which operates the nation’s only oil refinery, fell 3.7 percent to $2.60 after reporting its margins and throughput for March and April. It showed gross refining margins in March and April fell to US$3.99 a barrel, down from more than US$4 at the beginning of the year and over US$6 in 2011.
“Again it has showed negative movements in these margins – that stock has been under a huge amount of pressure,” Williamson said.
Shares in Rakon climbed 8.5 percent to 51 cents, leading the index higher, after the New Zealand dollar dropped more than half a US cent to 7536 cents. The maker of crystal oscillators for GPS devices has struggled with a surging dollar as most of its sales are made overseas.
Kirkcaldie & Stains was unchanged at $2.68 after Selwyn Cushing and his son David lifted their stake to 18.5 percent and will look to lift it to 19 percent. H&G, the Cushing family’s investment vehicle, will continue to accumulate shares, according to David Cushing.
Shares in Argosy Property rose 1.8 percent to 86.5 cents after the property investor sold an empty building on the North Shore at a 7 percent discount. The price achieved was 93 percent of the property’s $6.9 million book value, indicating it sold at $6.4 million.
Tower fell 2.5 percent to $1.59 after a smaller rival insurer, China Taiping Insurance (NZ), told brokers it won’t underwrite new business in earthquake prone Wellington or Canterbury due to pressure from its reinsurer. Reinsurance premiums are expected to rise this year, with a large number of general insurers needing to renew their contracts for a July 1 start date.