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MARKET CLOSE: NZ stocks fall on weak economic growth

Thursday 23rd September 2010

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New Zealand stocks fell for a second day as the prospect of the country’s economic recovery stalling doused investor’s appetite for higher-yielding, or riskier, assets.

Fisher & Paykel Healthcare, Hallenstein Glasson and Vector paced falls on the exchange.

The NZX 50 Index fell 8.3 points, or 0.3%, to 3,228. Within the index, 18 stocks fell, 15 rose and 17 were unchanged. Turnover was $91.2 million.

The economy grew 0.2% in the three months to June 30, according to Statistics New Zealand, a quarter of the 0.8% forecast by a Reuters survey and below the 0.9% expected by the Reserve Bank. In the previous quarter GDP grew by 0.5%. Offsetting the negative tone was an upbeat result from Fonterra Cooperative Group, which lifted profit 12% to $685 million and raised this year’s total payout to farmers to $6.70 per kilogram of milk solids.

“The GDP numbers were a surprise, but I think everyone realised things have slowed materially in the last quarter in line with global movements - particularly in the US – and in New Zealand,” said Craig Brown, a senior investment analyst at ING New Zealand. “In some ways it can be seen as good in that it might stop the Reserve Bank feeling like it needs to raise rates anytime soon.”

F&P Healthcare (NZX: FPH ) fell 4.1% to $3.02, with manufacturing showing the biggest contraction among New Zealand’s economic sectors according to today’s GDP data.

Fisher & Paykel Appliances (NZX: FPA ) fell 1.7% to 59 cents.

Vector (NZX: VCT ) fell 1.8% to $2.20. Earlier today the company announced that it had raised US$182 million in a sale of unsecured notes to American investors. The bonds will mature in 2022, and the company will use the proceeds to repay $250 million worth of debt maturing in April. Vector declined to say how much interest the notes are paying. Brown said the bond sale was notable because it “shows financing is available for well-run companies”.

Auckland International Airport (NZX: AIA ) was unchanged at $2.08 after the company reported more overseas visitors last month, as business trips bounce back from a lull in the wake of the global financial crisis. Total international passengers rose 4.5% to 603,995 in August from the same month a year earlier, with business and conference visitors making up 43,706 of those people, up 18% from a year ago.

Telecom (NZX: TEL ) was unchanged at $2.03. The Commerce Commission released revised criteria on the definition of when an alternative backhaul operator is deemed to be a competitive constraint to Telecom. Backhaul services give Telecom’s rivals access to transmission routes between the phone company’s local exchanges and their networks and let them provide landline and broadband services.

Outdoor clothing retailer Kathmandu (NZX: KMD ) led gainers, rising 2.9% to $1.77 one day ahead of the release of its annual results. Hallenstein Glasson (NZX: HLG ), the clothing retailer, fell 1.9% to $4.12.

Pyne Gould (NZX: PGC ) rose 2.4%to 42 cents. The stock has been hovering around this level since it announced the merger deal with Canterbury Building Society and Southern Cross Building got approval from the respective companies' boards. fell 1.4 percent to $2.91. The Accident Compensation Corp. said it’s lifted its stake in PGC to 7% from 6%.

Cavalier (NZX: CAV ) rose 2.2% to $3.19. The company is expected to benefit from the Canterbury earthquake as business and homeowners begin the repair process. The latest Treasury and central bank estimate of the costs of damage from the quake is $4 billion, including $2 billion for residential housing and contents, $1 billion for commercial property and $1 billion for infrastructure.

Fletcher Building (NZX: FBU ) rose 0.2% t0 $8.62 after Formica Group, its underperforming US unit, said it expects to deliver annual profits of some $100 million, according to press reports.

Shares in ANZ (NZX: ANZ ) rose 0.5% to $31.05 after it will "vigorously" defend legal a class suit in Australia over its exception fees, which includes charges for insufficient funds, overdrawn bank and credit card accounts, and late credit card payments. Australia's biggest litigation funder, IMF, is bank-rolling the bid to recoup as much as A$5 billion.

Heritage Gold (NZX: HTG ) was unchanged at 2.8 cents after press reports said the company will go ahead with the listing Broken Hill Prospecting, in which it hold a 33% stake.

Tourism Holdings (NZX: THL ) was unchanged at 80 cents after the company said it had agreed to sell its transport and tourism businesses in Fiji to local interests and will use the funds to repay debt.

 

Businesswire.co.nz



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