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Overseas investors boost NZ sharemarket

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 7 NZPA - The New Zealand sharemarket posted a 1 percent gain today despite a lack of corporate news, as investors continued to digest the implications of Saturday's large Canterbury earthquake for businesses and the economy.

Trustpower and L&M Energy also announced successful capital raisings, while Trustpower is considering another $75 million raising, with a possible $25m in oversubscriptions.

Overseas buying appeared to be pumping up the New Zealand market, said Bryon Burke of Craigs Investment Partners.

The benchmark NZX-50 index closed up 30.99 points at 3174.14, after yesterday's 35-point gain.

"New Zealand's made the world headlines -- for a country that's normally off people's radars, it's come onto the radar, and with all these companies that have had reinsurance it's almost an injection of (overseas) capital into the economy," Mr Burke said.

"It's probably more of people that have had spare cash, whether they be from overseas or whatever, entering the market, and the thinness of the New Zealand market means some prices going higher than they should."

The earthquake was a catalyst to get investors off the sidelines, although it was not the only explanation for strength on the New Zealand market, he said.

Six top-50 stocks declined, while blue chips led the way with sizeable gains.

Fletcher Building was up a cent at 815 following yesterday's 39c jump, as investors expected a lot of building work to come its way as a result of rebuilding after the quake.

Telecom was up 4c at 213, Contact Energy rose 9c to 574, Auckland Airport gained 2c to 206, Sky TV jumped 9c to 519, and Sky City was up 2c at 297.

Freightways jumped 5c to 298, Nuplex was up 10c at 340, Ebos rose 5c to 685, Abano rose 4c to 510, Tower was up 3c at 188 and Steel & Tube gained 3c to 240.

Goodman Property Trust, whose manager Goodman NZ raised $45m through a private bond issue, was up a cent at 96.

L&M Energy was untraded after news it had raised $1.4m through a share purchase plan, and Trustpower was steady at 728.

Although there were no corporate results today, there are still a handful of companies yet to report, including The Warehouse and Briscoe Group on Friday.

Results had generally been "pretty good", with no real negative surprises. Forecasts, while mostly cautious, were not negative, Mr Burke said.

In Australia, the S&P/ASX 200 index was steady -- down just 2 points -- after Labour leader Julia Gillard was finally annointed PM by two of the three independent MPs who held the balance of power following the recent election.

The US was on Labour Day holiday overnight, New Zealand time, after Wall Street ended last week strongly.

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