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NZX Close: Shares fall; Farming Systems drops, Infratil gains a second day

Tuesday 30th March 2010

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New Zealand shares fell, halting four days of gains. NZ farming Systems Uruguay fell on concern it is having to sell assets to meet some obligations. Infratil advanced for a second day as investors warmed to its purchase of Shell New Zealand assets.

The NZX 50 fell 1.452, or 0.04%, to 3249.648. Within the index, 25 stocks fell, 11 rose and 13 were unchanged. Turnover was $55.3 million.

Farming Systems  (NZX: NZS ) declined 5% to 38 cents. The developer of dairy farms in South America said yesterday that it sold 2,500 hectares of land for US$8.5 million in a move that will allow it to repay nearly half an outstanding debt to shareholder PGG Wrightson, related to performance payment stretching back to years.

“Selling assets to pay a performance fee is unattractive,” said Craig Brown, who helps manage $3.3 billion at of ING New Zealand. “That’s only part of a number of issues, and it’s going to take a lot of work to regain credibility. I suspect the shares are of limited institutional interest, it’s really more of a retail stock.”

Pan Pacific Petroleum (NZX: PPP ) fell 6.1% to 31 cents, the biggest decline on the NZX 50.

Carpet maker Cavalier (NZX: CAV ) shed 3.9% to $2.69 and NZX (NZX: NZX ), the stock exchange operator, dropped 3.7% to $1.85.

BLIS Technologies (NZX: BLT ) climbed 4% to 10.5 cents after the company said yesterday that Edinburgh Equity Nominee  exercised an option to subscribe for 1 million mandatory convertible cumulative preference shares, raising $1 million. Good progress was being made with business development in North America, chairman Peter Fennessy said.

Fisher & Paykel Appliances (NZX: FPA ) gained 1.6% to 62 cents after New Zealand’s sole whiteware manufacturer said it will replace its exclusive dealership relationship with select retailers and open up its distribution network across the country. The restricted distribution arrangement dates back to the 1950’s.

The move “is being seen as positive,” ING’s Brown said. “It will give them a lot more stores than before, ones like Harvey Norman. We’ve seen a price rally today.”

Infratil (NZX: IFT ) rose 2.4% to $1.72 as the investment group briefed institutional investors on its acquisition of the Shell assets. “People are getting more comfortable with what they’re hearing,” Brown said.

Mainfreight (NZX: MFT ), the trucking company, gained 2% to $6.25 and children’s clothing chain Pumpkin Patch (NZX: PPL )  rose 1.9% to $2.29.

Telecom (NZX: TEL ) climbed 1.4% to $2.16.

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