Thursday 13th November 2008
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The NZX 50 fell 42.563, or 1.5%, to 2729.632 at the 5 p.m. close of trading in Wellington. Within the index, 39 stocks fell, seven rose and four were unchanged. Turnover was about NZ$50 million, about half the average of more normal times.
NZ Farming Systems Uruguay led decliners, dropping 12% to NZ$1 on prospects for lower returns from dairy farms as commodity prices slide. ANZ Banking Group’s NZX shares fell 8.6% to NZ$18.75, tracking Australian financials lower.
Stocks in Asia extended the slide on Wall Street yesterday after Treasury Secretary Henry Paulson scrapped plans to buy mortgage assets, more companies slashed their profit forecasts and General Motors awaited government aid to stave of collapse.
The S&P/ASX 200 Index tumbled 5.9% in late Sydney trading, led by energy, resource companies and banks. Japan’s Nikkei 225 Index dropped 5.8% in mid-day trading.
“Everything here is negative – just a wave of pessimism,” said Barry Lindsay, research manager at First NZ Capital. “We see this as a bottoming out process – if you can look beyond next week then sit it out.”
New Zealand Oil & Gas fell 7.1% to NZ$1.27 after the price of crude oil declined 5.3% to US$56.16 a barrel. Pike River Coal fell 3% to 97 cents, below its 2007 IPO price of NZ$1, on expectations coal prices will continue to slide.
Tourism Holdings fell 4.6% to 87 cents, its third daily decline, after the company predicted a first-half operating loss. The stock has sunk almost 65% this year.
Fisher & Paykel Appliances declined 3.7% to NZ$1.32 after New Zealand's largest maker of home appliances, posted a first-half loss on costs to relocate factories overseas and waning sales in the US and at home. The stock is down 60% this year.
Warehouse Group fell 1.8% to NZ$3.78, Pumpkin Patch dropped 2% to 97 cents and Michael Hill International fell 3% to 60 cents after government figures showed retail sales rose a smaller-than-expected 0.1% in September. Excluding auto-related businesses, sales fell 0.5% against expectations of a 0.4% gain.
Separately, the Bank of New Zealand-Business NZ Performance of Manufacturing Index showed manufacturing activity fell to a record low in October in the sixth straight month of contraction. A report by credit checking agency Veda Advantage showed the number of corporate defaults on debt jumped 47% in the third quarter.
Across Asia today, figures in China showed industrial output growth slowed more than expected last month, damping the prospects for companies exporting into the region.
Property trusts were among the handful of gainers today. Kiwi Income Property Trust rose 2% to NZ$1.01 and Goodman Property Trust rose 1% to NZ$1.01. Property for Industry gained 1.9% to NZ$1.07.
First NZ Capital’s Lindsay said the nation’s property trusts tended to be relatively low geared, with high tenancy rates and sufficient debt facilities in place.
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