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MARKET CLOSE: NZ stocks fall; Freightways leads decliners

Thursday 18th November 2010

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New Zealand stocks fell for a third session, as a recent spate of cautious outlook statements from companies cooled investor appetite for equities. Transport and infrastructure stocks led the bourse lower, with Freightways pacing decliners.

The NZX 50 Index fell 8.84 points, or 0.27%, to 3,280.469. Within the index, 22 stocks fell, 12 rose and 16 were unchanged. Turnover was $102.5 million.

Freightways, the express package company, fell 2.7% to $2.90, and Auckland International Airport fell 1.4% to $2.09.

Mainfreight fell 1.4% to $7.30. Earlier today the company reported a jump in first-half earnings as it managed to squeeze more profit from a moribund US economy and lifted returns in Asia.

Profit excluding one-time items rose 52% to $16.5 million in the six months ended Sept. 30, from $10.9 million a year earlier, the Auckland-based company said. Sales rose 20% to $645 million, or a gain of about 25% excluding foreign exchange movements. Offshore sales now account for 70% of Mainfreight’s revenue, generating 50% of earnings before interest, tax, depreciation and amortisation.

Tourism Holdings fell 8% to 69 cents after it told shareholders that earnings growth would be difficult with the backpacker market softening due to the strong New Zealand and Australian currencies.

Infratil fell 1.1% to $1.87.

“There is cooler mood coming out of AGMs, which has seen investors being more a cautious,” said Paul Richardson at BT Funds Management. “Generally, what is going on in these meeting is that people tend to turn to outlook statement first.”

AMP fell 0.8% to $6.55 on the NZX after AXA Asia Pacific Holdings’ independent directors unanimously recommend minority shareholders accept a proposed A$13.3 billion merger of the companies’ Australian and New Zealand businesses.

Under the proposal AXA AP shareholders will receive A$6.43 per share, consisting of cash and AMP shares, as well as the receipt of AXA APH’s 2010 final dividend of up to 9.25 cents per share.

Allied Farmers fell 5% to 1.9 cents. The company’s Matarangi Beach Estates was put in receivership after it turned down the chance to sell the assets back to Hanover Finance principles Mark Hotchin and Eric Watson at a discount.

HSBC cancelled the beachfront development company’s $19 million term loan facility after Allied refused to provide support for the facility that has been in default since last December. HSBC has now appointed KordaMentha as receiver.

Pyne Gould rose 2.5% to 41 cents, pacing gainers on the exchange. PGG Wrightson rose 2.1% to 49 cents, and AMP NZ Office Trust rose 1.3% to 78 cents.

Telecom rose 1.4% to $2.14. Axa AP today issued a substantial security holder notice to the NZX saying it had reduced its holding in the telco from 7.5% to 6.4%.

Consumer confidence in November is static, matching the previous four months, according to the latest ANZ-Roy Morgan measure.

The measure, which gauges confidence in the first two weeks of this month rose only one point to 114.5 from Oct, its 1008 interviews balanced by a two point lift in male confidence to 119, and a one point drop in female confidence to 110. This is the lowest level of female confidence since August 2009.

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