MARKET CLOSE: NZ stocks fall on weak risk appetite, AMP leads declines

Tuesday 16th November 2010

New Zealand stocks fell for the third time in three sessions, as a weaker tone overnight on US markets sapped investor appetite for riskier stocks. AMP paced decliners, while Fisher & Paykel Appliances Holdings rose.

The NZX 50 Index fell 13.16 points, or 0.4%, to 3,315.06. Within the index, 25 stocks fell, 10 rose and 15 were unchanged. Turnover was $108.1 million.

"US markets weakened off a little towards the close, and sentiment today has been pretty subdued as a result," said Craig Brown, who helps manage $1.1 billion in equities for One Path. "The market has had a significant run of late, and investors are perhaps taking a little time to reflect."

AMP (NZX: AMP ) fell 5.5% to $6.76 on the NZX, and fell 1.8% to A$5.35 on the ASX, giving back most of yesterday's gains when the Australian wealth manager announced it was making another bid for Axa Asia Pacific.

The company teamed with France's AXA SA to offer A$6.43 per share for each AXA Asia Pacific share, valuing the fund manager at A$13.3 billion.

Rakon (NZX: RAK ) fell 3.2% to $1.22, Telstra (NZX: TLS ) fell 2.7% to $3.28, and Michael Hill (NZX: MHI ) fell 2.5% to 79 cents.

Guinness Peat (NZX: GPG ) fell 1.4% to 73 cents, after it told shareholders that while demand levels had picked up at Coats, the thread-maker that constitutes its biggest investment, the overall outlook for the year was still uncertain.

Infratil (NZX: IFT ) fell 0.5% to $1.89 after its bottom-line result turned to a $16.1million profit for the six months ended September 30 from a $31.4 million loss a year earlier.

The infrastructure investor says its Greenstone Energy petrol retailing business and electricity retailer Infratil Energy Australia have been stand-out performers. Infratil's earnings before interest, tax, depreciation, amortisation and financial instruments rose 25% to $258 million in the six months, with IEA's earnings jumping to $61 million from $10 million previously and Greenstone making its first contribution, an equity accounted $13 million.

Brown said the fall in the share price was probably due to the market anticipating a good result from Infratil, with the rise in profit already priced in.

Shares are trading at their highest level since November 2008.

Fisher & Paykel Appliances (NZX: FPA ) rose 3.5% to 60 cents, pacing gainers on the main board of the exchange.

Vector (NZX: VCT ) rose 1.6% to $2.51; NZX (NZX: NZX ) rose 1.3% to $1.53; and Nuplex Industries (NZX: NPX ) rose 1.2% to $3.38.Fletcher Building (NZX: FBU ) rose 0.1% to $7.94.

The company is leading one of two consortia shortlisted to build Auckland's Waterview Connection, the biggest and most complex roading project in New Zealand.

The other group bidding to construct the $2 billion 4.5km connection between the Southwestern motorway with the Northwestern motorway is led by Australian construction company Leighton Contractors.

OceanaGold (NZX: OCG ) fell 2.8% to $4.50 after it said investors had undervalued its portfolio of New Zealand and Filipino gold-mining operations, and predicts gold production from South Island mines of between 270,000 and 290,000 ounces in the current financial year.

In a sector where the average Economic Value-to-M&I resources ratio per ounces of gold is US$307, OceanaGold is trading at around US$135 per ounce, the company says in an investor presentation lodged with the NZX.

Oceana also announced the appointment of Mick Wilkes as chief executive, commencing in mid-January, 2011. Wilkes comes to the gold and copper miner from a role leading evaluation studies and construction at the Prominent Hill copper/gold project in South Australia.

Businesswire.co.nz

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