Sharechat Logo

MARKET CLOSE: Shares slip on rising jobless rate; Telecom, Fletcher fall

Thursday 6th August 2009

Text too small?

New Zealand shares declined after official figures showed the unemployment rate has climbed more than economists and the Reserve Bank were expecting. Telecom (NZX: TEL ), Contact Energy (NZX: CEN ) and Fletcher Building (NZX: FBU ), the biggest companies on the index, fell.

The NZXZ 50 Index fell 27.92, or 0.9%, to 3056.14, retreating from a 10-month high for a second day. Within the index, 25 stocks fell, 14 rose and 11 were unchanged. Turnover was about $64 million.

Telecom fell 3.5% to $2.75, leading the NZX 50 lower. Contact, the biggest utility on the bourse, declined 1.7% to $6.50. Fletcher Building fell 1.3% to $7.35.

New Zealand’s jobless rate rose to a nine-year high of 6% in the second quarter, worse than the 5.6% rate economists had forecast and the central bank’s 5.9% prediction. As many as 60,000 jobs may be lost by the end of March next year according to the New Zealand Institute of Economic Research, which predicts unemployment will hit 7% next year.

“Up until now we’ve been somewhat surprised by the continued strength in the employment market,” said Craig Brown, who helps manage about $1 billion at ING New Zealand. “This number shows a realisation of that tough environment and people are starting to sign up for unemployment relief.”

Fast food chain Restaurant Brands (NZX: RBD ) fell about 2% to $1 and medical supplies distributor Ebos Group (NZX: EBO ) sank 1.8% to $5.35.

Westpac (NZX: WBC ) climbed 2.6% to $28.51 and ANZ (NZX: ANB ) rose 0.4% to $24.25, joining a rally in lenders on the ASX.

The S&P/ASX 200 Index rose 1.4% to 4322 after government figures showed Australian employers unexpectedly added workers last month, stoking optimism economic growth will accelerate in New Zealand’s biggest export market.

Lion Nathan (NZX: LNN ) rose 0.2% to $14.71 after Independent valuer Lonergan Edwards & Associates concluded Kirin’s A$3.5 billion offer for the 53.9% of the brewer it doesn’t already own is fair and in the best interests of non-Kirin shareholders. On the strength of the report, Lion’s independent directors endorsed the proposal, which shareholders will vote on next month.

Goodman Property Trust (NZX: GPT ) rose 1% to 99 cents after announcing it netted $27.5 million from the sale of Pernod Ricard NZ House on Auckland’s viaduct precinct and is lining up similar sized deal as it offloads non-core assets to strengthen its balance sheet. 

“There was a good level of interest which surprised us a little,” Dakin told BusinessWire. “We’ve got another one on the market, which we expect to be in a similar range” as the Pernod Ricard building, he said.  

Mainfreight (NZX: MFT ), the biggest trucking firm on the NZX 50, fell 0.6% to $4.77. The trucking company is rated ‘neutral’ by First NZ Capital analyst Kar Yue Yeo, according to the ShareChat website. The decline in volumes in the first quarter will more than offset the company’s cost saving measures, he said.

Skellerup Holdings (NZX: SKL )gained 3.6% to 57 cents, the biggest advance on the benchmark index on the day. Fisher & Paykel Healthcare (NZX: FPH ) rose 1.9% to $3.25 and Steel & Tube Holdings (NZX: STU ) gained 1.9% to $3.26. 

 



  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: Mainfreight shares rise in weak market
MARKET CLOSE: Telecom powers ahead
MARKET CLOSE: NZX stars on the market
MARKET CLOSE: NZX lifts nearly 10pts, despite post-Budget slip
MARKET CLOSE: NZX lifts again in quiet day
MARKET CLOSE: NZX closes up but off best levels
MARKET CLOSE: Sharemarket bounces unconvincingly
MARKET CLOSE: NZX finishes down again
MARKET CLOSE: Tower shares slip as quake impact hits home
Market Close: Shares ease ahead of OCR call