Saturday 20th December 2008
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New Zealand stocks snapped a three-day advance, following Wall Street lower
amid credit rating cuts worldwide and weak migration at home. PGG Wrightson
fell almost 12%, the third daily decline since cutting its profit forecast.
The NZX 50 Index fell 28.171, or 1%, to 2679.42. Within the index, 25 shares declined, 14 gained and 11 were unchanged. Wrightson fell 15 cents to NZ$1.15, a four-year low. Pumpkin Patch declined 7.7% to 96 cents and Fletcher Building fell 5% to NZ$5.83.
The Dow Jones Industrial Average fell 2.5% yesterday and companies ranging from General Electric to Rio Tinto have had the credit ratings put under review or cut. Investors are awaiting decisions including the future of U.S. automakers General Motors and Chrysler and the any action by the Bank of Japan to weaken the yen.
“The lead from offshore isn’t good,” said Paul Robertshawe, fund manager at Tower Asset Management. In New Zealand, Tower “is looking at the opportunities to move but not seeing the green light yet,” he said. “It could be a nasty Christmas for a lot of companies.”
Tourism Holdings gained 3.3% to 63 cents after government figures showed inbound tourist numbers held up in November, even as the nation lost migrants.
“The lower exchange rate will boost the spending power of current tourist arrivals” and should help soften the impact of the economic downturn, said Robin Clements, economist at UBS New Zealand.
Jewellery chain Michael Hill International fell 3.5% to 56 cents and has declined 52% this year. On Dec. 16, the company said results for the five months to Nov. 30 showed retail conditions had been “very challenging in the second quarter so far with “same store” sales flat in Australia and negative in both New Zealand and Canada.”
Hallenstein Glasson Holdings fell 0.9% to NZ$2.25. Yesterday the clothing chain said the outlook for 2009 “is expected to be difficult, with the lower NZ dollar exchange rate and higher domestic unemployment both expected to impact adversely on the New Zealand retail environment in 2009.”
New Zealand Oil & Gas fell 3.8% to NZ$1.28. The energy
explorer has been increasing its holding in Pan Pacific Petroleum to gain more
exposure to the Tui oil field. Crude oil for January delivery was at US$36.29
a barrel in Singapore and is down more than 20% this week.
In Australia, the S&P/ASX 200 index was up 19.3, or 0.5%, to 3600.5 in late afternoon trading. Mining companies including Newcrest Mining Mt Gibson iron were among gainers. The Nikkei 225 Index fell 0.3% to 8639.24 in early afternoon trading.
NZX Top 50
Last updated: 19/12/2008 5:34pm
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