MARKET CLOSE: NZ shares fall as kiwi surges; Telecom drops

Monday 11th May 2009

New Zealand’s NZX 50 Index snapped a five-day rally as a surge in the kiwi dollar eroded offshore appetite for New Zealand shares. Telecom, the biggest company on the index, dropped 4%.

The NZX 50 fell 43.91, or 1.5%, to 2829.22, the first decliner since May 1. Within the index, 19 stocks fell, 27 rose and four were unchanged. Turnover was $79.7 million.

Telecom (NZX: TEL ) slipped 11 cents to $2.61, trimming its advance this year to 19%. The company is preparing to roll out its high-speed mobile network at the end of the month, a two-week delay, after a challenge from Vodafone was settled out of court with Telecom agreeing to increase filtering on its network to prevent interference.

Shares fell today as the New Zealand dollar rose to a five -month high 60.90 US cents, up from 59.39 cents in New York on Friday.

Telecom has led the fall, with “large movements having been led by offshore investors taking a view on the currency,” said Rickey Ward, equities manager at Tyndall Investment Management.

APN News & Media (NZX: APN ) dropped 8.3% to $1.65. The Australian publisher of the New Zealand Herald last week lowered its full-year earnings forecast to a range of A$100 million to A$110 million, from a February estimate of about A$120 million. Shareholders were told at their annual meeting that market conditions would be difficult in the short term.

PGG Wrightson (NZX: PGW ) fell 7.1% to $1.45 and Sky City Entertainment Group (NZX: SKC ) slid 3.3% to NZ$2.94.

Clothing retailer Postie Plus Group (NZX: PPG ) surged 20% to 36 cents after the clothing and babyware chain part-owned by Kathmandu founder Jan Cameron posted a 7.3% gain in third-quarter sales and said its margins widened.

Managing director Ron Boskell said the company was on track to “deliver a modest profit” for the year.

“The market’s generally starting to look through the current short-term noise and perhaps things are getting better,” said Craig Brown, who helps manage the equivalent of $1 billion for ING New Zealand.

Children’s clothing chain Pumpkin Patch (NZX: PPL ) gained 1.5% to $1.35 and Hallenstein Glasson Holdings (NZX: HLG ) rose 0.4% to NZ$2.71, brining its advance this year to 26%.

Figures today showed New Zealand spending on debt and credit cards at retailers rose for a third month in April, stoking optimism consumers may be feeling less gloomy about their prospects. Transactions in retail industries rose 0.3% last month, the same-sized gain as in March, according to Statistics New Zealand.

Transactions at core retail industries, which exclude motor vehicle-related outlets, rose 0.5% in the latest month, after a 0.7% in March.

“It is early days, but we are seeing signs of a recovering trend becoming entrenched in the retail data,” said Bernard Doyle, New Zealand strategist at Goldman Sachs JBWere. “This is consistent with other signs of recovery in leading indicators in house sales and business/consumer confidence.”

Jewellery chain Michael Hill International (NZX: MHI ) climbed 6.3% to 68 cents.

New Zealand property values fell 9.2% last month, a slight improvement from the previous month’s 9.3% decline, suggesting the recession-induced slide is abating, according to QV Valuations. The average sale price fell to $372,981 last month from $378,399 in March, which QV said reflected more sales being made at the lower end of the market.

Tap-maker Methven (NZX: MVN ) jumped 7.4% to $1.30, leading the NZX 50 higher. Carpet-maker Cavalier (NZX: CAV ) gained 5.7% to $1.85.

NZX (NZX: NZX ) shares rose 5.9% to $8.20 following the company’s announcement on Friday that it will raise about $21 million to fund acquisitions, including a 50.1% stake in NSX, an Australian stock exchange operator whose board has recommended NZX be allowed to make the purchase.

Xero (NZX: XRO ) jumped 12% to $1.45 after the online accounting services company announced a reseller deal with British Telecom. Under the agreement, which begins in July, Xero’s services would be made available to 1.7 million small business customers of BT, according to a statement from Xero.

In Australia, the S&P/ASX 200 Index slipped 0.5% to 3922.20 as companies including oil and gas producer Santos announced plans to raise more capital. Santos plans to raise A$3 billion by selling shares.

Murchison Metals soared 24% to A$1.59 after Gindalbie Metals and its Chinese investors agreed to help fund develop a new railway and port facility that is 50% owned by Murchison.

Businesswire.co.nz

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