NZX CLOSE: NZ shares fall; Infratil dips on Shell talks, NZR drops

Tuesday 3rd November 2009

New Zealand shares fell for a second day as the Reserve Bank of Australia raised interest rates in the nation’s biggest export market and Infratil Ltd. said it was in talks to acquire assets from Royal Dutch Shell Group.

The NZX 50 Index declined 24.74, or 0.8%, to 3158.99. Within the index, 28 stocks fell, seven rose and 15 were unchanged. Turnover was $68.8 million.

Infratil fell 3.6% to $1.59, leading the index lower. The investment group today said it has teamed up with the New Zealand Superannuation Fund for exclusive talks over the possible acquisition of Shell’s local refining and downstream businesses. Shell owns 17.1% of New Zealand Refining, the nation’s only oil refinery, worth $219 million at today’s price. NZR fell 1.7% to $5.11 today.

“The market is saying, are Shell the sort of people that are likely to give you a bargain – the answer may be no,” said Alan Moore, who helps manage $350 million at Milford Asset Management. “What are they going to pay for it and hoiw will they pay.”

He said several issues are overhanging Infratil stock, including the health of founder Lloyd Morrison, who is battling cancer, and some disappointment the company didn’t offload more European assets when it exited Luebeck Airport.

NZ Windfarms dropped 9.8% to 46 cents as it traded jibes with its turbine supplier, Windflow Technology Ltd., in their dispute over delivery and payment of turbines.Windflow, which is 19.9% owned by Mighty River Power, is threatening legal action against Windfarms, the only customer so far for its locally developed two-bladed turbine, after it withheld payments of more than $3.5 million. Windflow was unchanged at $1.30.

Skellerup Holdings fell 3.6% to 53 cents and Fisher & Paykel Appliances declined 3% to 64 cents.

Abano Healthcare Group climbed 2.4% to $6.40 after confirming it has sold its New Zealand audiology business to concentrate on hearing care in Australia and Asia. Abano sold its 64 Bay Audiology clinics to a unit of Crescent Capital Partners for $158 million.

Air New Zealand gained 1.6% to $1.30 after announcing it will replace its domestic Boeing Co. 737 aircraft with Airbus A320’s, taking advantage of the global airline slump to pick up planes at more favourable rates.

“This is a very good time to buy aircraft,” said Air NZ group general manager short haul airline Bruce Parton. “The industry is at the bottom of a deep cycle so demand for aircraft is limited, creating favourable conditions for buyers with strong balance sheets like Air New Zealand.”

Michael Hill International, which counts Australia as a major market, fell 3% to 64 cents after the Reserve Bank of Australia lifted its benchmark interest rate a quarter point to 3.5%, as expected.

Telstra Corp., Australia’s biggest phone company, slipped 3.3% to $4.06 on the NZX while Westpac Banking Corp. declined 2% to $31.90. Australian insurer AMP Ltd. declined 1.4% to $7.30 on the NZX.

Children’s clothing chain Pumpkin Patch fell 1.5% to $1.95 and Auckland International Airport declined 2.5% to $1.92.

Businesswire.co.nz

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