MARKET CLOSE: Stocks down on the back of broadband news

Thursday 9th September 2010

Shares fell for a second straight day, after Crown Fibre Holdings prioritised three regional deals in its short list for the government funded roll-out of an ultra-fast broadband network, dousing hopes for a Telecom-led national approach.

The NZX 50 fell 9.4 points, or 3%, to 3,161.7. Within the index nine stocks fell, 28 rose and 13 were unchanged. Turnover on the day was $90.9 million.

Crown said Telecom (NZX: TEL ) still remains one of 14 companies being considered for future negotiations on the $1.8 billion “fibre-to-the-home” initiative and would continue in a partner selection process. Shares fell 5.2% to $2.02.

Vector (NZX: VCT ), the lead partner in the Regional Fibre Group which also put forward a wide-ranging proposal, was unchanged at $2.08

“I think the reaction today has been a bit kneejerk, but you also have to consider that the $2.12 level had the Telecom-centric model built into it,” BT Funds' Paul Harrison said. “If they are not involved in the broadband initiative, the only thing it can do is compete, and how it fares from there is down to how it competes with line providers and the margins.”

Guinness Peat Group (NZX: GPG ) fell 1.6% to 61 cents, Air New Zealand (NZX: AIR ) fell 1.6% to $1.26 and Kiwi Income Property Trust (NZX: KIP ) fell 1% to 98 cents.

Shares in Fisher & Paykel Healthcare (NZX: FPH ) fell 0.6% to $3 on softer manufacturing data.

Statistics NZ figures released today show manufacturing volumes fell 1.8% during the June quarter, the third consecutive decrease, and the lowest sales volumes since Sept. quarter of 1999.

Windflow Technology (NZX: WFT ) fell 4.4% to $1.10 after the company revised up its loss for the year ended June 30 to $7.95 million because of costs of remedial work for customer NZ Windfarms.

The manufacturer previously estimated the loss at $5 million to $6 million. The increased loss "arises from additional provisions WTL has recorded in respect of the full costs of remedial work arising from the agreement reached with NZ Windfarms."

AMP (NZX: AMP ) fell 0.9% to $6.35 amid news the Australian Competition and Consumer Commission knocked back National Australia Bank’s revised bid to takeover AXA Asia Pacific’s Australasian businesses. AMP’s bid for the assets was trumped by NAB, though the wealth manager has already secured regulatory approval for a deal to go through.

On the ASX, shares of NAB rose 3.7% to A$24.84.

Fletcher Building (NZX: FBU ) rose 0.7% to $8.22 on news that the value of total building work hit an 18-month high in the June quarter as the construction sector bounced back from a slump. Data from Statistics NZ shows that while the sector is noticeably up on its low in September last year, it is still 18% below a peak in December 2007.

Steel & Tube Holdings (NZX: STU ) rose 1.7% to $2.46.

Both companies are expected to benefit from the rebuilding efforts after the Canterbury earthquake, which the Treasury has estimated is likely to cost in the region of $4 billion.

Cavalier (NZX: CAV ) rose 5.7% to $2.80, pacing gains on the NZX 50. Telstra (NZX: TLS ) rose 3.3% $ 3.75, and NZ Oil & Gas (NZX: NZO ) rose 2.3% to $1.31.

Businesswire.co.nz

Comments from our readers

No comments yet