Mainfreight soars as investors welcome expansion

New Zealand company transport and logistics company, Mainfreight, has chosen to debt fund the acquisition of Netherlands-based Wim Bosman by borrowing as much as 120 million euros. Photo / Sarah Ivey

Mainfreight shares rose 5.79 per cent today to a new record as investors expressed confidence the logistic's company's latest expansion offshore.

Mainfreight's shares rose 47c to 859 after the company said it has agreed to by Netherlands-based transport and logistics firm Wim Bosman Group for an initial purchase price of 110 million euro ($209m).

Grant Williamson at Hamilton, Hindin, Greene said that often when New Zealand companies made big acquisitions their share price fell, but Mainfreight was becoming a truly international logistic company.

The share price reaction showed that investors had confidence in Mainfreight's management.

Otherwise, the sharemarket was strong on a day other markets were weak as many investors anticipated that the official cash rate will be cut by the Reserve Bank of New Zealand on Thursday, making investments in shares more attractive.

Many economists are expecting the Reserve Bank will cut the OCR from 3 per cent to 2.5 per cent on Thursday, and today Prime Minister John Key said a cut in the rate would probably help the country.

The benchmark NZX-50 index closed up 11.948 points, or 0.35 per cent, at 3430.054. Turnover was worth $155.75 million. There were 48 rises and 30 falls among the 114 stocks traded.

Xero rose 11c to 262 on a day it revealed US expansion plans at an investor day organised by NZX. NZX rose 1c to 186.

OceanaGold rose 5c to 347 and NZOG rose 2c to 90 on a day in which Canadian-listed Tag Oil reported an oil discovery at its onshore Taranaki.

Pumpkin Patch rose 7c to 135, while Kathmandu eased 4c to 201 and Hallenstein Glassons eased 3c to 355. Pyne Gold Corp rose 1c to 30, and SkyCity rose 3c to 348.

Fletcher Building rose 3c to 884, Contact Energy rose 1c to 609 and Telecom eased a cent to 215.

Auckland Airport rose 2c to 228, Infratil rose 2c to 200 and TrustPower rose 1c to 713.

Westpac eased 19c to 3200, Tower eased a cent to 197.

In the United States, Wall Street erased most of its weekly gains on Friday (local time) as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labour market news. US unemployment fell below 9 per cent for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region.

The Dow Jones industrial average was down 0.7 per cent at 12,169.88, the Standard & Poor's 500 Index was down 0.7 per cent at 1321.15, and the Nasdaq Composite Index was down 0.5 per cent at 2784.67.

For the week, the Dow rose 0.3 per cent and the S&P and the Nasdaq both gained 0.1 per cent.

- NZPA