MARKET CLOSE: NZ shares fall as Euro debt fears linger

Wednesday 12th May 2010

New Zealand shares fell, pushing the NZX 50 Index down for the fifth day in six, as fears linger about the ability of Europe to contain a debt crisis.

NZ Farming Systems Uruguay (NZX: NZS ) slipped amid talk receivers of Rural Portfolio Investments will sell its 10 million shares and Guinness Peat Group (NZX: GPG ) extended its decline after it failed to announce its ‘value return’ plan.

The NZX 50 fell 10.9, or 0.3%, to 3156.1. Within the index, 25 stocks fell, 10 rose and 15 were unchanged. Turnover was $90.5 million.

Euro-zone leaders have agreed a 750 billion euro bailout package to prevent the debt crisis in Greece and potentially Portugal and Spain from spreading, though there are concerns the fund may contain the problem without fixing it.

At the same time, investors are questioning whether China will take steps to cool its economy, damping import demand in the giant Asian economy.

“The underlying problems of some of these countries are still not being fixed,” said Stephen Wright, private client adviser at ASB Securities.

“The 750 (billion euros) stabilizes but doesn’t resolve anything. It just buys some time. World markets are still inclined to worry about something.”

Farming Systems Uruguay fell 5% to 38 cents. The receivers of RPI this week found ready buyers for about 6% of PGG Wrightson and will probably be looking to offload the RPI stake in Farming Systems as well.

Wrightson jumped 1.8% to 56 cents as the overhang in the market was removed and some investors were buoyed by stronger prices for farm commodities, which boosts the income of Wrightson’s customers.

GPG fell 3.5% to 82 cents. Having indicated it would reveal its proposal to return value to shareholders, of which it has given no details, the investment group said at its annual shareholders’ meeting last week that it needed more time, given the complexity of its investments in various jurisdictions.

Bourse regulator NZX (NZX: NZX ) gained 0.6% to $1.77 as rival share trading platform Unlisted announced private equity firm Armillary will take over management of the alternative platform from next month.

National Property Trust (NZX: NPT ) was unchanged at 48 cents after a group of investors led by David Cushing, a director of H&G, called a meeting to dump the property investor’s manager, which is part of the St Laurence group of companies.

Goodman Property Trust (NZX: GPT ) was also unchanged at 98 cents, while AMP New Zealand Office (NZX: APT ) fell 1.3% to 74 cents.

OceanaGold (NZX: OGC ), which operates the Macraes and Reefton goldfields, surged 8.9% to $3.48 after the price of gold rose to a record US$1,234.50 yesterday as some investors turned to the precious metal as an alternative to currency holdings.

New Zealand Windfarms (NZX: NWF ) rose 4.2% to 25 cents after the supplier of its turbines, Christchurch-based Windflow Technology, said the resolution of a dispute with Windfarms removed a “fundamental uncertainty” about the company.

Windflow (NZX: WTL ) was unchanged at 98 cents.

Carpet maker Cavalier (NZX: CAV ) was the pick of the leaders, gaining 3.9% to $2.65.

Businesswire.co.nz

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