Wednesday 15th October 2008
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New Zealand stocks fell after Telecom Corp. said spending on its high-speed
mobile network will reduce earnings this year. The biggest company on the NZX
50 sunk to the lowest since 1992.
The NZX 50 Index dropped 43.29, or 1.5% to 2905.684, making yesterday’s 6% surge the only blip in eight days of decline. An ING survey today showed only 21% of New Zealand investors were holding local stocks last quarter, down from 29% in the second quarter.
The decline followed weaker U.S. stocks amid concern the vast sums governments are putting up to preserve the financial system won’t prevent a global economic downturn that will erode corporate profits.
“Profit is the next focus once the financial sector settles down,” said Michael Gordon, market economist at Westpac. “Yesterday’s rally was one in a lifetime.”
Telecom fell 5.8% to NZ$2.43, bringing its slide this year to about 40%. The telco today cut its earnings forecast as much as 8% after detailing plans to invest NZ$574 million to roll out 3G services fast enough to beat rival Vodafone. Earnings will be NZ$460 million to NZ$500 million this year, below its previous estimate.
Australian insurer AMP Ltd. fell about 8% to NZ$6.95 on the NZX while Tower Ltd. dropped 3.4% to NZ$1.44. Pike River Coal fell 2.7% to NZ$1.47. The website steelprices-china.com said coal prices have reportedly plummeted since the middle of September. Slower growth in China's economy will dampen demand for coal, according to the report.
L&M Petroleum fell about 7% to 12 cents. An analyst report from McDouall Stuart, dated Oct. 2 but released by the company yesterday, rated the explorer “speculative buy” and said the company may require some "delicate capital management" to complete its programmes.
|NZ Top 50||2,904.642||-44.332 (-1.50%)|
|ASX 200||4,300.000||-35.200 (-0.81%)|
|FTSE 100||4,394.21||+137.31 (+3.23%)|
Last updated: 15/10/2008 5:09pm
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