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MARKET CLOSE: NZ stocks fall; Kathmandu goes ex-div, retailers pace decliners

Friday 12th November 2010

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New Zealand stocks fell for the second time in three sessions led by retailers as the market digested a handful of earnings announcements.

The NZX 50 Index fell 20.91 points, or 0.6%, to 3,310.58. Within the index, 24 stocks fell, 12 rose and 14 were unchanged. Turnover was $81.1 million.

Kathmandu (NZX: KMD ) led the bourse lower as it sank 8.4% to $1.67 after its 7 cents a share final dividend, while Michael Hill (NZX: MHI ) fell 1.2% to 80 cents.

Warehouse (NZX: WHS ) was unchanged at $3.88, recovering late in the session after it said sales stalled in the first quarter on weak demand for CDs and DVDs and the ongoing effects of a sluggish economy.

"There have been quite a few company AGMs and results out this week, which the market is taking some time to sift through and digest," said Rickey Ward, domestic equities manager at Tyndall Investment Management. "People seem to be looking at the retail sector today and asking questions about its prospects."

Fletcher Building (NZX: FBU ) fell 1.6% to $7.90, which said could due to a combination of an offshore shareholder selling their stake and a lack of appetite in the market.

Turners Auctions (NZX: TUA ) fell 2.8% to $1.37 after the company said 2010 profit will fall as much as 11%, reflecting subdued demand for secondhand vehicles, the impact of the GST hike and disruption from Canterbury's earthquake. Net income in calendar 2010 will be in a range of $2.9 million to $3.1 million, down from $3.27 million in 2009, the Auckland-based company said in a statement.

Allied Farmers (NZX: ALF ) , which took on the Hanover and United loan books in a failed bid to become a major lender, fell 4.4% to 2.2 cents after HSBC pulled the credit line on one of the firm’s subsidiaries. The Hong Kong-based lender called its $19 million loan facility to Matarangi Beach Estates after Allied refused to put up the same guarantee as the previous owners, Eric Watson and Mark Hotchin, who had poured the vehicle into Hanover to try to keep it afloat.

AMP (NZX: AMP ) rose 2.6% to $6.80, pacing gainers on the exchange. PGG Wrightson (NZX: PGW ) rose 2% to 52 cents, and Cavalier (NZX: CAV ) rose 1.6% to $3.20.

Sanford (NZX: SAN ) rose 1.5% to $4.70 after it was cleared to buy rival Pacifica Seafoods by the Commerce Commission, boosting its market share of Greenshell mussels, Pacific Oysters, and king salmon. The regulator said it was satisfied the acquisition wouldn’t dim competition in any of the relevant markets.

Infratil (NZX: IFT ) rose 1.1% to $1.88 after it said it was preparing to sell more 'infrastructure' bonds to repay existing debt and lengthen its maturity profile. The Wellington-based group didn't say how much worth of the debt it will sell, but said terms would be similar to its existing series of the debt.

Telecom (NZX: TEL ) rose 0.9% to $2.18 after it announced today that it had partnered with Vodafone to bid for the government's Rural Broadband Initiative. According to press reports the bid, which consists of a combination of fibre, copper and wireless technologies, is one of five submitted.

Kiwi Income Property Trust (NZX: KIP ) was unchanged at $1.04 after it was forced to realise a $143.9 million tax bill as part of the government's changes to rules on claiming depreciation, though the hit may be reversible. The property investor made a net loss of $118.5 million in the six months ended September 30 compared to a loss of $18.2 million a year earlier, the Auckland-based trust said in a statement. Distributable profit, the preferred measure for property investors which strips out unrealised movements in fair value, rose 10% to $33 million.

APN News & Media (NZX: APN ) the publisher of the New Zealand Herald and operator of the Radio Network, rose 2.6% to $6.80 after it said it had accepted for commitments for $100 million in bonds with a coupon rate of 7.8% and maturing in March 2016. When the company announced the book build, it said it may sell $150 million of bonds with the option of $50 million of over subscription.

Oyster Bay (NZX: OBV ) was unchanged at $1.85 after the company gave the thumbs up to Delegat’s (NZX: DGL ) new and improved offer for the 45% of the grape grower it doesn't own. Delegat's raised its offer by 23 cents to $2.08 in cash, or one Delegat's share for each share of Oyster Bay, valuing the target company at $18.7 million. That's a 12% more than today's share price, the same premium it made in the original offer of $1.80 a share when Oyster Bay was at $1.60. Shares in Delegat's were also unchanged at $1.80.

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