Recovery drive lures Brambles buyers

INVESTORS bought into Brambles Industries on hopes that the logistics company is at last fixing the problems at its pallets business.

The stock, buffeted in recent months by takeover rumours, put on 27 cents, or 5.8%, to A$4.95 in Sydney. That will hopefully put a smile on the face of David Turner, in the chief executive's hot seat since late October.

The gains followed a briefing from the Anglo-Australian company in Spain that its recovery remained on track, targets would be met and the outlook was as solid as could be expected.

In particular, there were positive comments on the Chep pallet-hire business, which typically accounts for more than half of the group's profits. The distinctive blue pallets, used to ship a vast range of goods within and between countries, had had a nasty habit of going missing, knocking Brambles' bottom line. Turner, previously chief financial officer, took the reins when his predecessor, Sir CK Chow, unexpectedly opted to join Hong Kong's underground railway company.

When the change was announced, Turner talked of imposing 'greater control'. There now seems to be some early substance to that intent.

The wider Australian market managed to forge higher despite a decision by the Reserve Bank of Australia to pull the interest rate trigger for the second time in as many months.

Brokers said the rise was not unexpected, enabling issues that had fallen ahead of the move, namely banks, to rebound when the rate rise was announced.

Australia & New Zealand Banking Group put on 31 cents, or 1.9%, to A$17.05, Westpac Banking added 22 cents, or 1.5%, to A$15.35, and National Australia Bank traded at A$29.29, better by 37 cents, or 1.3%.

Qantas, the carrier in which British Airways holds 17%, managed to claw back some of its losses. It rose a cent to A$3.42. The stock has been hit by recent news of extra competition from Virgin Atlantic into Sydney.

Resources plays - proxies for the global recovery - also strengthened with Rio Tinto climbing 22 cents to A$35.71. The All Ordinaries-index climbed 23.4 points to 3220.10.

Japanese equities turned lower, unsettled by a scandal swirling around the chairman of consumer finance business Takefuji. Police have arrested Yasuo Takei on suspicion of ordering a wire-tapping. The shares plunged 700 yen to 5420 yen, down 11.4%.

Although there were no indications that the problems spread any further than Takefuji, its peers also retreated. Promise, a rival consumer finance group, sank 250 yen, or 4.8%, to 4940 yen.

Signs of fresh dollar weakness and corresponding yen strength hurt exporters. Honda Motor dropped 40 yen to 4390 yen, while Toyota Motor eased 20 yen to 3400 yen.

Fuji Photo managed a second day of gains on plans to raise its investment in wide-screen television components. It rose 70 yen, or 2.1%, to 3340 yen.

The Nikkei 225 Average declined 83.76 points to 10,326.39.

In Korea currency woes also came to the fore as the won strengthened against the greenback, raising a question mark over firms that earn profits overseas.

LG Electronics, which exports consumer goods, declined 1000 won, or 1.6%, to 60,900 won. The Korea Composite index was little changed, off 0.36 points at 807.42.