MARKET CLOSE: Sharemarket eases but select stocks perform

Monday 20th December 2010

The New Zealand sharemarket was weak but Air NZ rose on strong operating statistics for November, and Michael Hill rose as the family owner clarified plans to up its stake.

The benchmark NZX-50 index closed down 25.16 points, or 0.76%, at 3299.96, which was near where it started the day. The US market was flat on Friday, but tensions on the Korean peninsula kept traders wary in Asia and trading is thin ahead of the holiday season in some markets.

Contact Energy (NZX: CEN ) fell 10c to $6.14, giving up some of the gains it made last week. The rain across the country was likely to bring wholesale electricity prices down, said Hamilton Hindin Greene director Grant Williamson.

Rural stocks were mixed, with PGG Wrightson (NZX: PGW ) up 3c to 47 but Allied Farmers (NZX: ALF ) was unchanged at 2c.

Shares in Michael Hill (NZX: MHI ) rose 2c to 86 after Durante Holdings, set up to consolidate the holdings of shares held by the Hill family through family trusts, said it is offering 90c per share to buy 5% of the shares it does not already own. That would see it buying 10m shares and take its holding to 50.2%.

Williamson said investors accepting the offer may be scaled back but the move showed confidence in the business from the family owner.

Air NZ (NZX: AIR ) rose 2c to $1.49 after reporting an 11% rise in passenger numbers in November from the same month a year ago. The share price is at its highest level since 2008.

Williamson said some companies with businesses offshore, performed well because of a weaker NZ dollar.

Mainfreight (NZX: MFT ) which has significant offshore operations, rose 15c to $8.02 and Nuplex (NZX: NPX ) rose 11c to $3.52.

Fletcher Building (NZX: FBU ) was unchanged at $7.73 on a day Crane Group directors rejected its offer. Telecom lost 2c to $2.21.

OceanaGold (NZX: OGC ) rose 25c to $5.05 and NZ Refining (NZX: NZR ) rose another 3c to $4.45.

The Warehouse (NZX: WHS ) rose 2c to $3.58 and Methven (NZX: MVN ) rose 2c to $1.69. Tourism Holdings (NZX: THL ) rose 1c to 79 and Auckland Airport (NZX: AIA ) rose 2c to $1.13.

Fisher & Paykel Appliances (NZX: FPA ) fell 1c to 51 and NZOG (NZX: NZO ) fell 2c to 84.

In the US, stocks ended flat on Friday (local time) as investors shrugged off encouraging economic signs and a tax-cut package expected to lift economic growth. Trading ended shortly before President Barack Obama signed a tax bill into law.

The $US850 billion package extends Bush-era tax cuts for another two years and expiring unemployment benefits through next year.

In a hopeful sign for the economy, the Conference Board said its index of leading economic indicators rose 1.1% in November, the fastest pace since March. The index - which tracks data such as orders for new goods and materials - rose 0.4% in October.

Stocks wavered in a tight range Friday, a day after major indexes hit two-year highs.

The Dow Jones industrial average fell 0.1% to close at 11,491.91, the broader S&P 500 eked out another 2010 high rising 0.1% to close at 1243.91, and the Nasdaq composite rose 0.2% to 2642.97.

NZPA

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