MARKET CLOSE: NZ shares retreat from 18-month high; NZO, PPP weaken

Friday 16th April 2010

New Zealand shares declined, with the NZX 50 Index retreating from an 18-month high on perceptions valuations are now fulsome. New Zealand Oil & Gas dropped on signs a part-owned well may come up dry.

The NZX 50 slipped 9.81, or 0.3%, to 3311.30, the second daily decline after the index reached the highest level since September 2008 on Wednesday. Within the index, 20 stocks fell, 14 rose and 16 were unchanged. Turnover was $60 million.

Equity markets weakened across Asia today, after climbing on signs of a positive start to the U.S. earnings season and figures showing China’s economy grew at a cracking pace in the first quarter. Japan’s Nikkei 225 Index slipped 1.6% today and Hong Kong’s Hang Seng fell 1.3% after data showed an increase in Americans filing jobless claims and China tightened rules for some home purchases.

“It’s difficult to find anything that’s cheap at the moment” in the equity market, said Paul Harrison, who helps manage $300 million at BT Funds Management.

NZ Oil & Gas fell a progress report for its 10% owned Hoki-1 well showed no signs of hydrocarbons, which was “a bit of a duster,” Harrison said.The oil company’s shares fell 3.1% to $1.56. Crude oil fell for a second day on concern the U.S. economy isn’t recovering as fast as hoped, with U.S. crude sliding below US$85 a barrel.

Pan Pacific Petroleum fell 5% to 38 cents.

Millennium & Copthorne Hotels NZ Ltd. dropped 6.7% to 42 cents as senior executives said they are heading to China next week to get directly involved in overturning a series of unauthorised asset sales by a rogue local executive that have gutted the hotel company's joint venture.

Nuplex Industries, the specialty chemicals maker, fell 1.5% to $3.30 and Fisher & Paykel Appliances dropped 1.6% to 60 cents amid concerns manufacturers are facing higher raw material costs that will squeeze their profit margin.

Restaurant Brands, the fast food franchise company, rose 2.2% to $2.31, the highest close since June 1997, when the company’s share began trading on the NZX.

“The results they are posting are pretty good,” BT’s Harrison said. “They seem to have the ability to improve store returns by reformatting their stores” and maintaining tight management controls.

Telecom was unchanged at $2.18 after Fitch Ratings lowered the company’s credit rating one notch to A- with a negative outlook.

Outdoor equipment retailer Kathmandu Holdings gained 2% to $2.55 and children’s clothing chain Pumpkin Patch rose 1.8% to $2.28.

Businesswire.co.nz

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