MARKET CLOSE: Michael Hill shines in a dull market

Wednesday 25th August 2010

New Zealand stocks fell for the first time in three sessions, as Australian banks ANZ and Westpac led the index lower amid heightened fears over a double-dip recession in the US.

The NZX 50 fell 18.6 points, or 0.6%, to 3006.1. Within the index 21 shares fell, eight rose and 21 were unchanged. Turnover was $71.5 million.

Stocks fell across the region, with Japan’s Nikkei down 1.8% to 8829.8, Hong Kong’s Hang Seng down 0.4% to 20570.2, Singapore’s Straits time down 0.1% to 2919.6 and Australia’s ASX 200 down 1.2% to 4328.4.

“We had a pretty weak lead overnight from international markets, and that has just continued into this part of the world, with the trend pretty consistent through Asia and Australia,” ING manager Craig Brown said. “Locally the low levels of liquidity have also exacerbated market movement and just turned it into a pretty soggy negative day.”

Pacing decliners on the day, Australian bank ANZ (NZX: ANZ ) fell 2.8% to $27.90 on the NZX and dropped 1.6% to A$22.28 on the ASX. Westpac (NZX: WBC ), fell 2.2% to $26.55 on the NZX and fell 1.6% to A$21.10. Telecom fell 2% to $1.99, breaking below the two dollar mark for the first time since August 2.

The biggest gainer on the day was jewellery retailer Michael Hill (NZX: MHI ), which rose 4.6% to 68 cents after the Hill family said it’s looking to increase its holdings in the company to from 48% to 50.1%. The move is waiting for shareholder approval, but ING’s Brown said the market seems to be looking on it “favourably”.

Emma Hill, a director at the company and spokesperson for the Hill family, said the family wants to take advantage of a depressed share price to take control.

"We've always wanted to buy a bigger stake in the company, and we think the stock is undervalued right now," she said. "It is just opportunistic with the right price coming at the right time."

NZ Farming Systems (NZX: NZS ) rose 2.9% to 72 cents, topping Olam International's sweetened takeover offer of 70 cents amid speculation Uruguay’s rival bidder Union Agriculture Group or a third, unnamed, group may push the bidding higher.

Skellerup (NZX: SKL ) rose 9.7% to a 22-month high 80 cents after the company posted a full-year profit that beat its guidance after a recovery in second-half trading and forecast increased earnings for 2011.

PGG Wrightson (NZX: PGW ) fell 1.8% to 55 cents, NZ Oil & Gas (NZX: NZO ) fell 1.7% to $1.19 and financial services company Tower (NZX: TWR ) fell 1.6% to $1.85.

Shares in Pike River Coal (NZX: PRC ) were unchanged at 97 cents, after company announced that its annual net loss had widened to $39 million for the year ended June 30, from $13 million a year earlier, reflecting the continued development of its West Coast mine. The company burned through $47.5 million in cash in the year, up from $7 million the previous year.

Telstra (NZX: TLS ) rose 1.9% to $3.75, Kiwi income Property trust (NZX: KIP ) rose 1.1% to 96 cents, and commercial real estate investor Property for Industry (NZX: PFI ) rose 0.9% to $1.13.

For more on what's happening in US market read:
Contrarian Thoughts: A slow market explosion

Businesswire.co.nz

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