Sharechat Logo

MARKET CLOSE: NZ stocks fall on Wrightson warning; banks drop

Tuesday 20th January 2009

Text too small?
New Zealand shares fell, led by Contact Energy, after the biggest utility on the NZX 50 Index said profit may tumble 23%. Banks fell on concern losses at European lenders may hint at more red ink for financials down under.

The NZX 50 fell 39.956, or 1.5%, to 2708.019, the biggest decline in about four weeks. Within the index, 23 stocks fell, 12 rose and 15 were unchanged. Turnover was about NZ$73 million.

Contact fell 9.8% to NZ$6.63, a record decline for the stock, after chief executive David Baldwin said underlying profit may fall from last year’s NZ$237 million as hydro dams in the South Island spill water, the Tiwai Point aluminium smelter reduces output and gas costs rise. The price Contact pays for gas is tied to the producer price index which jumped an annualized 13.6% in the six months ended Dec. 31.

“The gas cost issue is significantly worse than people thought,” said Paul Robertshawe, equities manager at Tower Asset Management. Contact “is meant to be a defensive company and it came out with a significant profit warning.”

Australia & New Zealand Banking Group fell 4.4% to NZ$17 and Westpac Banking Corp. declined 4% to NZ$19, tracking Australian financial stocks lower, after Royal Bank of Scotland forecast of the biggest loss ever for a U.K. company, stoking fears about the global slowdown and concern more banks could face losses.

Rural services company PGG Wrightson fell 7.8% to NZ$1.18, tumbling for a second day after announcing it would shutter its Australian real estate and livestock units because of the tough economic conditions.

Wrightson is “relatively highly geared in an environment where that’s seen as a risk factor,” Robertshawe said. Stocks exposed to the rural sector have also suffered with the global slump in dairy prices, which spurred the European Union to offer export subsidies to its farmers this week.

Infratil fell 3.1% to NZ$1.58, its second daily decline, after the investment company said managing director and founder Lloyd Morrison would take leave immediately for treatment for a form of leukaemia. Chief operating officer Marko Bogievski will be acting CEO.

Fisher & Paykel Healthcare climbed 0.9% to NZ$3.23. The manufacturer of respirators and breathing masks gets about 80% of its revenue in U.S. dollars and stands to benefit from the weakening New Zealand dollar.

The kiwi currency tumbled to 53.22 U.S. cents, the lowest since early December, after figures showed inflation eased more than economists had expected last quarter, giving the central bank more room to cut interest rates on Jan. 29.

Sky Network Television, the pay-TV company whose programming and equipment costs are in U.S. dollars, rose 1% to NZ$3.89.

Inflation fell 0.5% in the final three months of 2008, while economists had expected a 0.4% fall. Annual inflation risks falling below the central bank’s 1% to 3% target range this year, economists say.

Pumpkin Patch, the children’s clothing chain with stores in New Zealand, Australia, the U.K. and the U.S., fell 2.1% to 95 cents. Jeweller Michael Hill International fell 1.8% to 54 cents.

In Sydney, the S&P/ASX 200 Index dropped 3% to 3481.4 as banks and mining companies declined.

Rio Tinto dropped 6% to A$38.10 and BHP Billiton, which is scheduled to release its latest production data tomorrow, declined 5.2% to A$28.80 after metals prices fell.

Origin Energy, which owns a half-stake of Contact Energy, dropped 4.4% to A$14.52. Fairfax Media gained 0.3% to A$1.48 after announcing the sale of Southern Star television for A$75 million. It will use the funds to repay debt and strengthen its balance sheet. Australia and New Zealand Banking Group dropped 4.3% to A$13.81.

The Nikkei 225 Index fell 3.1% to 8003.02 in early afternoon trading as concern about the widening global financial downturn hurt financial such as Mizuho Financial Group.

(Businesswire.co.nz)

NZX Top 50
Last updated: 20/01/2009 5:08pm

AIA 1.75 -0.05
AIR 0.90 0.00
AMP 6.60 +0.06
ANZ 17.00 -0.78
APN 2.68 0.00
APT 0.97 -0.01
CAV 1.92 0.00
CEN 6.66 -0.69
EBO 4.40 0.00
FBU 5.80 -0.05
FPA 1.30 -0.02
FPH 3.23 +0.03
FRE 2.82 -0.04
GFF 1.84 -0.01
GMT 0.96 -0.01
GPG 0.91 -0.01
HLG 2.20 0.00
IFT 1.58 -0.05
IMP 1.09 0.00
ING 0.65 0.00
KIP 1.03 0.00
LNN 10.20 +0.20
MFT 4.70 0.00
MHI 0.54 -0.01
MVN 1.25 -0.01
NPX 3.08 0.00
NZO 1.21 -0.03
NZR 5.80 +0.02
NZS 0.60 0.00
NZX 5.30 -0.10
PFI 1.10 +0.01
PGW 1.18 -0.10
POT 6.25 +0.05
PPL 0.95 -0.02
PRC 0.99 -0.02
RAK 1.10 -0.05
RYM 1.40 -0.01
SAN 5.20 -0.05
SKC 3.09 0.00
SKL 0.72 +0.01
SKT 3.89 +0.04
STU 2.90 -0.05
TEL 2.42 +0.08
THL 0.70 +0.02
TLS 4.36 0.00
TPW 7.20 +0.10
TWR 1.65 -0.01
VCT 2.08 +0.01
WBC 19.00 -0.80
WHS 3.71 +0.01

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Telecom and Air New Zealand gain
MARKET CLOSE: NZX 50 snaps 4-day slide as earnings awaited; Mainfreight gains
MARKET CLOSE: Auckland Airport feels effects of global downturn
MARKET CLOSE: Shares fall with global slide; Rakon, Nuplex fall
MARKET CLOSE: Pumpkin Patch slips as investors mull downsizing
MARKET CLOSE: Weaker building stats weigh on Fletcher Building
MARKET CLOSE: Telecom and Contact Energy make gains
MARKET CLOSE: NZ shares mixed, FPA, Sky City fall, Rakon gains
MARKET CLOSE: NZ shares gain; Telecom lifts on Chorus, Sky City gains
MARKET CLOSE: NZ shares fall a second day; Wrightson drops on forecast