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MARKET CLOSE: NZ stocks fall on global sentiment

Tuesday 30th November 2010

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New Zealand stocks fell as global anxiety over Europe's sovereign debt issues and a slowdown in the Chinese economy weighed on equity markets. Argosy Property Trust led decliners, while APN News & Media rose.

The NZX 50 Index fell 5.87 points, or 0.18%, to 3,264.5. Within the index, 15 stocks declined, 21 gained and 14 were unchanged. Turnover was $96.1 million.

In afternoon trade the Shanghai Composite Index fell 3.1% to 2,778.8, Japan's Nikkei fell 1.5% to 9,974.9, and Australia's ASX 200 fell 0.6% to 4,591.8.

"The Chinese slowdown and the debt issues in some of the European countries continue to weigh on the market," said Grant Williamson, a director at Hamilton Hindin Greene. "After a good number of months of trading higher, we just seem to be going into a period of consolidation and profit taking."

Argosy (NZX: ARG ) fell 2.6% to 74 cents after the property investor posted a $93 million first-half net loss yesterday, which reflected a $103.2 million non-cash charge for government tax changes. Before the tax charge, the trust made a $10.2 million profit compared with a $5.6 million loss in the same six months a year earlier, which reflected property devaluations.

Telecom (NZX: TEL ) fell 2.3% to $2.16, and Vector (NZX: VCT ) fell 0.4% to $2.43. Both companies submitted bids for government's ultrafast broadband initiative, and Williamson said the weakness on the day could be attributed to investors getting "impatient" ahead of the overdue announcement.

Goodman Property Trust (NZX: GPT ) fell 2% to 96 cents, after going ex-dividend.

Air New Zealand (NZX: AIR ) fell 0.7% to $1.37 after it revealed it was heavily losing money on an air service between Los Angeles, Samoa and Tonga. According to a letter quoted by press, the airline said in the five years it operated the once a week service it lost more than $5.2 million, and while it was willing to continue the Samoan and Tongan governments eventually pulled the plug.

Shares in Wellington Drive Technologies (NZX: WDT ) fell 47% to 4 cents after it said it was looking to raise $8.4 million to fund operations.

The North Shore-based company is looking to undertake a one-for-one pro rate renounceable rights offer at the issue price of 1.25 cents per share, it said in a statement. That's an 86% discount on the share price of 7.5 cents immediately before the announcement.

Widespread Portfolios (NZX: WID ) was unchanged at 16 cents after the resource investor narrowed its first-half losses to $151,000 as expenses continued to outstrip revenue.

The year-earlier first-half loss was $187,000. Its largest investment, accounting for 48.8% of its $11.7 million portfolio, is a stake in the Chatham Rise rock phosphate project, which is still in the exploration and proving phase.

Pike River Coal (NZX: PRC ) announced that it has sold its stockpile of about 20,000 tonnes of coal to state owned Solid Energy New Zealand Ltd. Shares in New Zealand Oil & Gas (NZX: NZO ) , which owns a 29% stake in Pike and holds several of its debt lines and options in the company, were unchanged at 92 cents.

Fletcher Building (NZX: FBU ) was unchanged at $7.95, government data showed building consents, excluding apartments, fell 1.1% in October to 1,096 compared with the previous month. That's the fourth consecutive monthly decrease, and has seen the trend in the number of new dwellings slide 20% since March.

Steel & Tube (NZX: STU ) fell 0.5% to $2.18.

APN (NZX: APN ) rose 4.2% to $2.50, leading pacing gainers on the bourse. Kathmandu (NZX: KMD ) rose 3.7% to $1.68, and AMP (NZX: AMP ) rose 2.9% to $6.65.

Abano Healthcare (NZX: ABA ) rose 0.4% to $5.09 after the specialist health-care clinic investor said it expects first-half underlying net earnings will be between $2.6 million and $2.9 million but its second-half results will be well down on that.

Chair Alison Paterson told the annual shareholders' meeting revenues for the six months ended November 30 are expected to be between $85.8 million and $86.8 million while earnings before interest, tax, depreciation and amortisation will be between $9 million and $9.5 million. The bottom line will be dragged down by recent changes in accounting rules to between $2.6 million and $2.9 million.

Turners & Growers (NZX: TUR ) rose 3.5% to $1.47 after the World Trade Organisation ruled that Australia's 90-year-old ban on New Zealand apples is unscientific and breaks international rules, effectively ending an exhaustive 14-year battle to get restrictions lifted.

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