Friday 11th March 2011
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Shares in Tower dropped 4% today as the insurer and fund manager disclosed that its costs are likely to be driven up by as much as $20 million by the Christchurch earthquake and its aftershocks.
Tower (NZX: TWR ) today warned that the extra expenditure cannot be recovered in the current financial year to September 30, and that its net profit will be eroded.
Its payouts direct to policy-holders has been expected to be only $5m after the September quake, but in the wake of the catastrophic February 22 aftershock -- thought to have killed over 200 people -- it has had to spend much more money on the re-insurance policies which underpin its clients.
The company, whose shares fell 8c to $1.86, also warned that the increase in re-insurance premiums will ramp up the premiums for retail customers.
And 2.9m Fletcher Building (NZX: FBU ) shares changed hands for $25.9m as the stock shed 7c to $8.79, after a senior executive said it could cost $30 billion to rebuild Christchurch after the earthquake and aftershocks.
The benchmark NZX-50 index finished down 23.39 points at 3382.84, after falling 8.19 points yesterday.
Of the 114 stocks traded, only 16 rose in price and 61 fell.
Over the week, 231.6m shares valued at $680m were traded.
The day's trade included 10 million Telecom (NZX: TEL ) shares valued at $20.6m, as the exchange's cornerstone stock stayed steady at $2.04c.
Some of the biggest falls in percentage terms were NZX (NZX: NZX ) which fell 3.3% or 7c to $2.03, PGG Wrightson (NZX: PGW ), down 3.8% or 2c to 51c, and miner Oceana Gold (NZX: OGC ) , down 5.48% or 20c to 345.
Child's clothing retailer Pumpkin Patch (NZX: PPL ), slipped 3%, or 4c, to $1.27 on 2.1m shares valued at $2.75m.
The Warehouse (NZX: WHS ) rose 7c to $3.45 after the company reported a fall in interim profit but held its interim dividend.
The company is being hurt by lower CD and DVD sales but said sales in many categories are growing, including in homewares, appliances, sporting goods and health and beauty. The company is forecasting a full-year net profit between $76 million and $80 million compared to $83 million last year.
Following Mainfreight's (NZX: FRE ) stellar rise earlier this week -- after announcing a deal to buy Netherlands-based transport and logistics firm Wim Bosman Group -- the stock eased 6c to $8.82, after falling 22c yesterday.
Across the Tasman, the Australian share market has suffered its worst weekly fall in just over nine months, with both major indice down more than 4% at the close.
The benchmark S&P/ASX200 index was 54.9 points, or 1.17 per cent lower at 4644.8.
In the United States, fears about the economy and unrest in the Middle East sent indexes skidding below key technical levels on Thursday as the near-term outlook for stocks grew cloudy.
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