MARKET CLOSE: NZ shares falls; Wrightson dips on Agria concern, Pike drops

Tuesday 27th October 2009

New Zealand shares fell, joining a world-wide slide, as doubts about the prospects for a speedy global economic recovery weighed on equity markets and commodities. PGG Wrightson (NZX: PGW ) fell on concern its new cornerstone shareholder has its own financial woes to deal with.

The NZX 50 Index declined 22.46, or 0.7%, to 3192.47, playing catch-up with offshore markets following the Labour Day holiday. Within the index, 35 stocks fell, eight rose and seven were unchanged. Turnover was a higher-than-average $135.4 million. Almost 13 million Telecom (NZX: TEL ) shares changed hands, the biggest volume in more than a month.

Shares dropped on Wall Street yesterday, with the Dow Jones Industrial Average falling 1.1%. In Asia today, Japan’s Nikkei 225 Index fell 1.4%, Hong Kong’s Hang Seng slipped 1.5% and Australia’s S&P/ASX 200 Index declined 1.5%.

“While there are clear expectations of an economic pock-up in the surveys, they are yet to be proved,” said Craig Ebert, markets economist at Bank of New Zealand. It is difficult to trust the “signal-to-noise ratio” after the global slump and there’s a risk that currently strong expectations “prove over-hopeful.”

Wrightson tumbled 10% to 61 cents, a two-week low, on lingering concerns about new 12% investor Agria Group, the Chinese agricultural services group which is yet to file its 2008 accounts and is facing class-action lawsuits over its 2007 IPO.

“We should only be selling major shareholdings in our icon companies to the world's best and at the highest price,” Brian Gaynor, who helps oversee $350 million at Milford Asset Management, wrote in the New Zealand Herald. “Instead the board of PGG Wrightson is selling a major stake to a small and unknown company at a bargain basement price.”

Telecom declined 0.4% to $2.49. Communications Minister Steven Joyce extended the deadline for submissions on the roll-out of ultra-fast broadband to November 27 from November 6.

Jeweller Michael Hill International (NZX: MHI ) fell 4.4% to 65 cents and clothing chain Hallenstein Glasson Holdings (NZX: HLG ) fell 1.9% to $3.04, even after the ANZ-Roy Morgan Consumer Confidence poll showed confidence climbed to a 22-month high this month, with more kiwis deeming it a good time to buy a major household item.

Warehouse Group (NZX: WHS ) gained 0.2% to $4.52.

Barramundi (NZX: BRM ), the Fisher Funds-managed investor in smaller Australian stocks, fell 11.9% to 74 cents after saying it increased its holdings of cash in the third quarter. The investor’s net tangible asset value grew by 22% to 91 cents.

Pike River Coal (NZX: PRC ), the developer of the South Island coal mine, fell 3.5% to $1.11, as prices of raw materials dipped.

Fisher & Paykel Healthcare (NZX: FPH ), which gets almost 80% of its revenue in United States dollars, gained 1.7% to $2.99. The kiwi dollar is likely to decline this week, according to all seven strategists and economists in a BusinessWire survey today.

Genesis Research and Development (NZX: GEN ) climbed 10% to 8 cents after shareholders on Friday voted unanimously in favour of a new joint venture company to commercially develop its research into gene silencing.

Businesswire.co.nz

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