MARKET CLOSE: Stocks fall as companies go ex-dividend

Wednesday 29th September 2010

New Zealand stocks fell for the second time in three sessions, as the market was weighted down by companies going ex-dividend including Cavalier, Fletcher Building, and Nuplex.

The NZX 50 Index fell 3.3 points, or 0.1%, to 3,226.8. Within the index, 12 stocks fell, 26 rose and 12 were unchanged. Turnover was $72.8 million.

Nuplex fell 3.8% to $3.26, Cavalier fell 2.8% to $3.11, Fletcher Building fell 2.8% to $8.35. Michael Hill fell 1.4% to 69 cents.

"The market is looking weak, weighed down by the number of companies that went ex-div today," said Karl Williscroft, a trader a Direct Broking. "Their performance is only related to their dividend payments though, which is making it look a lot worse that it is. If you factor that out they haven't done too badly on the day."

NZ Farming Systems fell 6.1% to 62 cents, pacing decliners on the NZX 50. The stock has started to ease back from the 70 cents level it has hovered around since Aug. 24, after the offer from Olam International closed, with the Singaporean commodities company now controlling 78% of shares.

The company released an independent appraisal report on internalizing its management contract, which concluded it is a fair deal for shareholders not associated with PGG Wrightson.

Pyne Gould rose 2.4% to 42 cents, leading gainers on the exchange. Telecom rose 2% to $2.08, APN News & Media rose 1.9% to $2.66, and Rakon rose 1.6% to $1.27.

Abano Healthcare rose 1.5% to $5.28 after the company said it is mulling options to return capital to shareholders after making a cash profit of $26 million on the sale of its stake in Australia's National Hearing Care.

Telstra was unchanged at $3.50 after chief executive David Thodey released notes for a briefing on its plans to spend A$1 billion on mobile handsets. Based on current performance, Telstra could "comfortably continue to pay shareholders an annual dividend of 28-cents per share should the board elect to do so in its regular reviews," given the company's strong free cash flow, he said.

Shares in Allied Farmers rose 11.5% to 3 cents after the company which unsuccessfully tried to transform itself into a major lender sold off a former Hanover loan to an undisclosed party. The deal, which concludes next week, will pay off its outstanding debt to Westpac, after which it will give an update on its funding arrangements.

Sanford rose 1% to $4. The company has applied for clearance from the Commerce Commission to acquire the Pacifica Seafoods Group of companies.

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