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NZX CLOSE: Shares mixed after GDP; HLG, WHS fall, Windfarms gains

Thursday 25th March 2010

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New Zealand shares were mixed after figures showed the economy grew at its fastest pace in two years in the fourth quarter as investors await tangible signs the return to growth is stoking earnings. Hallenstein Glasson Holdings declined.

The NZX 50 Index rose 4.825, or 0.1%, to 3137.549. Within the index, 20 stocks fell, 12 rose and 17 were unchanged. Turnover was a lower-than-average $48.4 million.

Hallenstein (NZX: HLG ), the clothing chain with stores in Australia and New Zealand, fell 1.5% to $3.40. The retailer posted a 56% gain in first-half profit, beating its guidance. Sales volumes in the first seven weeks of the second half were 2% down on the same period last year.

Warehouse Group (NZX: WHS ), the biggest retailer on the NZX 50, dropped 4.3% to $3.82 after shedding its 17 cents a share interim dividend. Pumpkin Patch (NZX: PPL ), the children’s clothing chain, declined 1.4% to $2.18.

The economy expanded 0.8% in the fourth quarter, matching market expectations, while growth in the third quarter was revised up to 0.3% from 0.2%, according to government figures today.

“Investors are looking to ensure the economy is starting to improve, starting to grow,” said Grant Williamson, a director at brokerage Hamilton Hindin Greene in Christchurch. “There’s not much evidence of that yet. The market’s looking for some direction at the moment and cannot find a lead.”

New Zealand Windfarms (NZX: NWF ) climbed 7% to 30 cents after funds associated with Australia’s Suncorp Group disclosed an increase in their holding to about 9.9% from 8.2%. Last week, Windfarms announced on Friday announced plans to raise $34.1 million in an eight-for-three cash issue at 15 cents apiece to enable it to keep operating. And on Monday, it said chief executive Steve Cross won’t renew his contract and will leave the company.

Pan Pacific Petroleum rose 3.3% to 31 cents today, leading the index higher. New Zealand Refining, the nation’s only oil refinery, gained 2% to $4.03. Investors are awaiting the outcome of talks between Infratil Ltd. and Shell Group, which may result in Shell selling its 17% holding in the refinery.

PGG Wrightson (NZX: PGW ), the nation’s largest rural services company, gained 1.7% to 60 cents after Fonterra Cooperative Group said it was upbeat about the outlook and a Hong Kong-based investor group said it was looking to spend up to $1.5 billion on dairy assets in New Zealand.

Fisher & Paykel Healthcare (NZX: FPH ) gained 0.9% to $3.27. Chief executive Mike Daniells told Fairfax Media that US President Barack Obama’s health reforms are a long-term positive for his company.

Dairy Equities (NZX: DEL ) fell 4% to 7.3 cents after announcing it has agreed to sell the majority of its remaining Fonterra Fair Value Shares to a group of investors assembled by Craigs Investment Partners. The sale signals another step toward winding up the company.

Telecom (NZX: TEL ) edged up 0.5% to $2.14 after the nation’s biggest phone company announced the departure of a second executive associated with its XT network. Paul Hamburger, who the company actually referred to as Mr XT, will leave in July. Chief transformational officer Frank Mount was the first to leave, when the company was forced to pay $15 million in compensation to customers over a string of outages on its XT mobile network.

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