MARKET CLOSE: NZ stocks fall ahead of US job report

Friday 8th October 2010

New Zealand stocks fell for the second time in three sessions, as investors stayed on the sidelines ahead the release of a key jobs report in the U.S., a bellwether for the economic recovery in the world’s largest economy.

Pyne Gould, Rakon, and Auckland International Airport led falls on the day.

The NZX 50 Index fell 3.7 points, or 0.1%, to 3,232.3. Within the index, 12 stocks fell, 15 rose and 23 were unchanged. Turnover was $95.4 million.

Notable on the local bourse: DNZ Property Fund (NZX: DNZ ) rose 2.7% to $1.16 after it was added to the NZX 50, just under two months after floating on the NZX, replacing NZ Farming Systems (NZX: NZS ) were unchanged at 65 cents.

DNZ’s share price means chief executive Paul Duffy is only 3 cents shy of the second tranche of his incentive scheme that will net him a million shares if it trades at $1.17 for five working days.

Scott Technologies (NZX: SCT ) rose 4% to $1.30 after the company posted its best earnings for seven years.

Scott reported net profit after tax of $2.8 million, and net “underlying earnings” of $3.9 million prior to the non-cash impact of building depreciation tax rule changes.

That result compared with a net $400,000 profit the previous year, and a loss of $818,000 in 2007/08.

Overshadowing traders was the US Commerce Department’s overnight release of non-farm payroll data for September, with a weak number seen as a factor that will prompt the Federal Reserve to implement additional monetary policy easing.

“People are hesitant to do anything today, and are just waiting for job numbers in the US tonight, which could easily move that market one way or the or the other,” Hamilton Hindin Greene director Grant Williamson.

“We’ll just have see how that turns out and react on Monday.”

Pyne Gould (NZX: PGC ) fell 4.8% to 40 cents; Rakon (NZX: RAK ) fell 1.6% to $1.22; and Auckland Airport (NZX: AIA ) fell 1.5% to $2.04.

NZ Oil & Gas (NZX: NZO ) fell 0.8% to $1.32 after the price of oil slipped more than 2%, pulling back from five-month highs above US$84 as a recovery by the US dollar prompted commodities investors to book profits.

NZX (NZX: NZX ) was unchanged at $1.62 on the day that the securities market operator launched its dairy derivatives market.

As of the close of business the NZX Dairy Futures market had recorded no trades, although the NZX said it had several offers up waiting for buy side response.

"Success for a derivatives market is literally one maybe two trades on the first day," said head of markets Fiona Mackenzie. "So today the focus is to get one or two trades in and we will be ecstatic."

Lyttelton Port (NZX: LPC ) was unchanged at $2.44. The company today said it will not know the final repair bill from the 7.1 magnitude Canterbury earthquake for as long as three months, though it will probably exceed initial estimates.

The port had to cancel its proposed merger with the Port of Otago last week to let it focus on repairs sustained by the earthquake, and the company said it could be several years before the foundation earth, which is reclaimed land, settles down from its agitated state.

Hallenstein Glasson (NZX: HLG ) was unchanged at $4.39 after investor David Wright cut his holdings in the clothing retailer from 9.3% to 6.5%, according to press reports. While the price was not disclosed, Wright’s Miromutu Trust would have netted $10.7 million at $4.30 a share, after 2.5 million shares were sold today and yesterday.

Windflow Technologies (NZX: WFT ) was unchanged at $1.10 after the company said it will deliver another loss next year due to an "inevitable" production gap and low demand growth in the electricity sector.

The scope of the loss was not declared. The gap will take place in the first half 2011, between the completion of the fourth batch of turbines for NZ Windfarms and the expected uptake in orders from the U.K., the company said in its annual report.

Goodman Fielder (NZX: GFF ) rose 2.9% to $1.78, leading gains on the NZX 50. Pike River Coal (NZX: PRC ) rose 1.8% to $1.13, and commercial property investor, Property for Industry (NZX: PFI ) rose 1.7% to $1.23.

Businesswire.co.nz

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