NZX CLOSE: NZX 50 sinks to 5-month low; PGC, Pike, NZR fall

Monday 8th February 2010

New Zealand shares fell, pushing the NZX 50 Index to a five-month low as Pyne Gould Corp. said it would take a charge against loan on Marac’s books and Pike River Coal fell amid expectations it will tap investors for more funds.

The NZX 50 Index declined 11.54, or 0.4%, to 3093.45, the lowest close since Sept. 3. Within the index, 26 stocks declined, 12 rose and 12 were unchanged. Turnover was $78.4 million.

Pyne Gould fell 4.4% to 43 cents, the lowest close since mid-October. The company’s Marac finance unit has turned up irregularities relating to a business loan and will take a $2.5 million provision against its first-half results, the company said today. It is still confident of meeting its full-year earnings target. The shares have tumbled have tumbled 63% in the past six months.

Pike, which recently announced further delays in production from its sole South Island mine, declined 3.2% to 91 cents.

“They are out of money – they need to raise it,” said Stephen Walker, head of asset management at Goldman Sachs JBWere (NZ). “The market assumes the most likely outcome is a placement or rights issue, so why buy them now.”

New Zealand Refining, the nation’s only oil refinery, dropped 3.9% to $3.66 after releasing a statement showing its processing margins fell to a six-year low last year. The average charge in 2009 was US$4.16 a barrel, down from US$9 in the previous year.

“Supply-demand fundamentals have not yet changed sufficiently to expect a sustained recovery in refining margins at this stage,” the company said today.

The NZX 50 has declined in 16 of the past 20 trading sessions and Walker said the decline meant some stocks had gone from being “reasonably fully priced” to looking “very interesting.”Fisher & Paykel Appliance rose 1.7% to 60 cents.

Hallenstein Glasson Holdings, the clothing chain that last month forecast a 50% jump in first-half profit after buoyant trading over the Christmas-New Year period and raised its dividend, climbed 2.5% to $3.64, leading the index higher today. Walker said investors are now awaiting the earnings season amid expectations activity is “still reasonably weak.”

Telecom Corp., which posts its earnings this week, shed 0.4% to $2.30. Michael Hill International, the jewellery retailer, fell 2.9% to 66 cents while Warehouse Group rose 0.8% to $3.78.

Skellerup Holdings, the manufacturer of rubber goods and milking equipment, fell 2% to 46 cents.

Fisher & Paykel Healthcare fell 1.2% to $3.35 after U.S. fund manager Capital Group Cos. Said in a filing it had reduced its holding in the health-care equipment manufacturer to 4.9% from 5.08%, selling shares at $3.38 apiece on Feb. 4.

Businesswire.co.nz

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