NZX CLOSE: Shares slip; FPA falls, HLG, retailers gain

Wednesday 9th September 2009

New Zealand shares fell for a second day, with Fisher & Paykel Appliances declining on the prospects of falling out of the NZX 15 Index and PGG Wrightson fell after brokerage lowered its valuation of the rural services company.

The NZX 50 Index fell 5.14, or 0.2%, to 3116.41. Within the index, 22 stocks fell, 17 rose and 11 were unchanged. Turnover was $78 million.

F&P Appliances (NZX: FPA ) declined 2.7% to 73 cents. The appliance retailer will drop out of the index of the 15 biggest companies on the index, to be replaced by courier firm Freightways Ltd (NZX: FRE ), which gained 3.6% to $3.17 today.

F&P Appliances today announced the sale and lease back of its head office and manufacturing site in East Tamaki for $53 million. It has conditional agreement to sell the rest of the site for $21 million. Proceeds will repay debt.

Vector Ltd (NZX: VCT ), the nation’s biggest power and gas distributor, fell 3.9% to $1.97, leading the NZX 50 lower.

PGG Wrightson (NZX: PGW ), the nation’s biggest rural services company, fell 1.4% to 72 cents after Craigs Investment Partners reportedly cut its target price to 74 cents from $1.06 because of the potential for an overhaul of its capital structure.

The overhaul “is likely to be dilutive to our current assessment of value," Craigs analyst David Oxley said, according to NZPA.

Investors are awaiting tomorrow's announcement from Reserve Bank Governor Alan Bollard, who is expected to keep the official cash rate at 2.5% while ending the bank’s easing bias and sounding a warning about the high kiwi dollar.The New Zealand dollar reached a 12-month high 69.93 U.S. cents today.

A high dollar erodes the value of companies’ overseas revenue. Fishing company Sanford Ltd. declined 1.2% to $5.07, while Fisher & Paykel Healthcare, which gets almost 80% of sales in U.S. dollars, slipped 0.9% to $3.35.

NZ Farming Systems Uruguay (NZX: NZS ) dipped 2.1% to 47 cents and Pike River Coal (NZX: PRC ) slipped about 2% to $1.

Ebos Group (NZX: EBO ) rose 2.2% to $6.08 after Australian equities analyst AspectHuntley recommended accumulating the stock because of its record of successful acquisitions and the recession-proof nature of medical sales.

Briscoe Group (NZX: BGR ) gained 0.9% to $1.16 after the owner of homeware, Rebel Sports goods, Urban Loft and Living & Giving chains posted a 111% gain in first-half profit, meeting its guidance, as cost cutting and the introduction of inventory management software helped fatten margins.

Clothing chain Hallenstein Glasson Holdings (NZX: HLG ) rose 4.5% to $3, leading gains in retailers, after government figures showed credit and debit card spending rose for a second month in August. The card data comes after the New Zealand Roy Morgan Consumer Confidence Rating rose 2.2 points to 114.5, the highest since March 2008.

“The broad theme of the data is one of retail spending stabilizing and starting to find a base, but not taking off,” said Philip Borkin, economist at ANZ National Bank.

Children’s clothing chain Pumpkin Patch (NZX: PPL ) rose 1.6% to $1.90 and Warehouse Group (NZX: WHS ), the biggest retailer on the index, rose 1% to $4.04.

APN News & Media (NZX: APN ) jumped 9.7% to $2.50, leading the NZX 50 higher. Its ASX-listed stock rose just 0.5%.

Businesswire.co.nz

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