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MARKET CLOSE: NZ stocks fall; Banks follow Aust lenders lower

Friday 25th June 2010

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New Zealand stocks fell for a second straight day, tracking Australian equities lower with banking stocks leading declines on the uncertainty of how government will plug its tax income gap to make up for the likely watering down of its resources tax proposal.

The NZX 50 fell 13.05 points, or 0.4%, to 3,036.4. Within the index 22 stocks fell, 10 rose and 18 remained unchanged. Turnover was $79 million.

Shares in ANZ (NZX: ANZ ) fell 1.9% to $27.70, and Westpac (NZX: WBC ) fell 2.55% to $26.80.

“There is a significant level of uncertainty in the Australian market around the change in leadership over there,” said Stephen Walker, head of asset management for Goldman Sachs JBWere. “It seems likely that the government will revise the resources tax, but that leaves a hole in budget, so they will have to look at taxing other things like banks or gambling.”

Fisher & Paykel Appliances (NZX: FPA ) fell 3.5% to 56 cents after data by Statistic New Zealand which showed that exports rose to a record in May, led by dairy products, crude oil and forest products, contributing to the nation’s fifth straight monthly trade surplus.

Fletcher Building (NZX: FBU ) fell 0.3% to $7.95, shrugging off a report by Westpac which said New Zealand was facing a housing shortage, with new residential housing construction predicted to lift by 23% in 2011.

Tower (NZX: TWR ) fell 2.13% to $1.84, as the market ignored news that it had won an appeal to renew policies sold through ANZ and National banks after the two parties fell out with the lenders wanting to transact with another policy writer.

Guinness Peat Group (NZX: GPG ) led gainers, up 7.5% to 43 cents after its New Zealand-based director Tony Gibbs announced plans to list the company’s Australian assets on the ASX had been scrapped.

“It is very surprising that the market has taken this statement as positively as it has,” Walker said. “I think that the Tony Gibbs statement, in terms of what it said, is exactly what shareholders would like it to do. But it was a Tony Gibbs statement, not a GPG statement, and it is unusual for board member to come out against board policy.”

Allied Farmers (NZX: ALF ) rose 2.3% to 4.3 cents after announcing it is still negotiating its banking facilities for the next financial year. The firm said it has yet to reach an agreement with its principal banker, Westpac and another lender. Allied has drawn down $16.5 million on its Westpac credit line, and has an overdraft of $2.5 million that expires on July 1. 

 

Pyne Gould (NZX: PGC ) was unchanged at 40 cents after announcing it had stumped up $15 million of the $100 million Torchlight facility extended to embattled financier South Canterbury Finance through PGC’s asset management unit.

 

Businesswire.co.nz



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