CLOSE: Stocks edge lower as profit takers set in on Fletcher Building's rally

Wednesday 15th September 2010

The NZX fell for the first time in four sessions as profit taking set in on Fletcher Building Ltd. after the stock touched a five-month high yesterday.

The NZX 50 fell 2.2 points, or 0.07%%, to 3,195.3. Within the index 11 stocks fell, 22 rose and 17 were unchanged. Turnover on the day was $53.5 million.

Fletcher Building (NZX: FBU ) fell 1.5% to $8.35. The shares had surged 17% in the past month.

“We’ve seen some profit taking in the market today, especially with Fletcher Building, which has had a pretty good run in the wake of the Canterbury earthquake,” said Grant Williamson, a director at Hamilton Hindin Greene. “We’ve seen it time and time again that when Fletcher gets close to the $8.50 mark profit takers come in. This is the fourth time we’ve seen it this year and it’s a continual trend with this stock.”

PGG Wrightson (NZX: PGW ) fell 3.3% to 59 cents, pacing decliners on the NZX 50. NZ Oil & Gas (NZX: NZO ), the energy exploration and production company, fell 3% to $1.28.

Reserve Bank Governor Alan Bollard is expected to keep the official cash rate at 3% tomorrow and economists will be watching for his latest take on the pace of the economy, which Williamson said was “not much of a concern for investors”.

Shares in Tower (NZX: TWR ) were unchanged at $1.85 after the company announced that it had agreed to compete with Vero Insurance for ANZ National Bank’s policyholders after they agreed to end an 18-month dispute.

The firms have been in a tussle since a March 2009 High Court ruled Tower was entitled to keep renewing policies sold to ANZ customers after the bank decided to change its provider to Vero.

Shares in Telecom (NZX: TEL ) were flat at $2.06 after the Ministry of Economic Development released a discussion document calling for submission on the phone company's proposal to carve out its network business.

Telecom is looking to split its units in a bid to tap government funds for the roll-out of super-fast broadband, though the MED said such a move won't end the network monopoly, which will need continuing regulation.

The ministry expects Telecom will hold on to the copper lines, mobile network and national backhaul links, while the demerged Chorus2 will get the access network.

NZX (NZX: NZX ) rose 4.5% to $1.62, pacing gainers on the NZX 50.

Fisher & Paykel Appliances (NZX: FPA ) rose 3.6% to 58 cents after the whiteware manufacturer exclusively licensed technology from Brazilian compressor maker Embraco.

The Brazilian company is owned by Whirlpool, which has a technology sharing alliance with F&P Appliances.

The compressor is expected to improve energy efficiency by up to 30%.

Michael Hill (NZX: MHI ) rose 2.9% to 70 cents, Cavalier (NZX: CAV ) rose 1.8% to $2.90 and ING Property Trust (NZX: ING ) rose 1.4% to 72 cents.

Steel & Tube (NZX: STU ) rose 1.2% to $2.55.

AMP (NZX: AMP ) rose 1.2% to $6.23 on the NZX and was last trading 0.4% up at A$5.13 on the ASX after National Australia Bank announced that it was scrapping its bid for Axa Asia Pacific Holdings following objection from antitrust authorities.

AMP had previous made an A$12.9 for Axa AP, but was trumped by NAB’s A$13.3 billion, despite having clearance from New Zealand and Australian regulators.

Businesswire.co.nz

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