MARKET CLOSE: NZ shares drift lower as Europe weighs; Mainfreight, Skellerup

Thursday 18th February 2010

New Zealand’s NZX 50 Index ended the session lower as global jitters about the potential for a sovereign default in Europe weighed on equities, offsetting gains for companies such as Skellerup Holdings, which posted improved earnings.

The NZX 50 fell 9.29, or 0.3%, to 3101.77. Within the index, 26 stocks fell, 16 rose and six were unchanged. Turnover was $74.7 million.

Australia’s S&P/ASX 200 Index was down 0.3% in late afternoon trading while South Korea’s Kospi fell 0.3% in early afternoon trading. European leaders are debating whether to come to the aid of debt-laden Greece, while in the U.S. there's concern Federal Reserve stimulus measures will end soon.

“There’s a concern out there for a country default,” said James Lindsay, who helps manage $400 million at Tyndall Investment Management. “Those large possibilities have the ability to rattle equity markets.”

Mainfreight (NZX: MFT ), the biggest trucking firm on the bourse, gained 1.7% to $5.90 after it said EBITDA in the third quarter climbed 14.8% and it expects similar growth in the final three months of the year.“Most people have price targets well and truly north of where it is now,” said Rickey Ward, also of Tyndall. “It’s a very good result.”

Skellerup Holdings (NZX: SKL ), the maker of milking equipment and rubber goods, surged 12.5% to 54 cents after announcing it had slowed the decline in earnings in the first half.

There was "growing confidence that the second half of the current year would see a marked improvement in profitability," said chairman Selwyn Cushing. “It is clear that the worst of the recession is over."

AMP (NZX: AMP ), Australia’s biggest provider of pension plans, fell 1.1% to $7.86 after posting a 5% decline in underlying earnings to A$772 million for calendar 2009 and saying it is still interested in acquiring Axa Asia Pacific Holdings after its takeover offer was trumped by National Australia Bank.

“Axa remains strategically important to us,” chief executive Craig Dunn said in a statement accompanying AMP’s annual results. “We are continuing to consider our position and will do what is in the best interests of shareholders.”

TeamTalk (NZX: TTK ) rose 4.4% to $2.35. The communications company today said first-half profit jumped 38% to $1.98 million, reflecting a reduction in financial costs such as a reversal of IFRS related revaluations of interest rate hedges. Sales were little changed at $15.3 million.

NZ Farming Systems Uruguay (NZX: NZS ) declined 2.6% to 38 cents and Pyne Gould (NZX: PGC ) fell 2.3% to 43 cents.

Air New Zealand (NZX: AIR ), the national airline, dropped 1.5% to $1.32 after trans-Tasman rival Qantas Airways Ltd. posted a 72% slump in first-half profit, citing weaker demand. Shares of Qantas tumbled 9.4% to A$2.69 on the ASX.

Auckland International Airport (NZX: AIA ), New Zealand’s busiest gateway, fell 1.6% to $1.81.Stock exchange operator NZX (NZX: NZX ) fell 2.4% to $2.05.

Among rising stocks, Rakon (NZX: RAK ) jumped 8.8% to 99 cents, the biggest gain on the NZX 50.

Businesswire.co.nz

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