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MARKET CLOSE: NZ stocks fall as risk appetite shrinks ahead of Fed announcement

Monday 1st November 2010

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New Zealand stocks fell for the first time in three sessions, as investors kept their bets to a minimum ahead of a string of major economic announcements this week. APN News & Media paced decliners on the bourse, while SkyCity rose.

The NZX 50 Index fell 5.16 points, or 0.2%, to 3,299.72. Within the index, 28 stocks fell, 10 rose and 12 were unchanged. Turnover was $57 million on a day marked by light volumes.

Investor activity was subdued ahead of a rates announcement by the Reserve Bank of Australia tomorrow, and the Federal Reserve’s long-awaited decision later in the week on how big their quantitative easing programme will be. The week is topped off by the release of US non-farm payroll data on Friday, a key barometer for the world’s biggest economy.

“You’ve got a scenario where we are experiencing one of the biggest weeks ever in terms of financial news, so people are understandably hesitant,” said Shane Solly, portfolio manager for Mint Asset Management. “They want to make sure it delivers something rather nothing before committing.”

APN (ASX: APN) fell 4.8% to $2.40, leading declines on the NZX 50.

Goodman Fielder (NZX: GFF ) fell 3.6% to $1.87, and PGG Wrightson (NZX: PGW ) fell 1.9% to 53 cents.

DNZ Property Fund (NZX: DNZ ) fell 0.9% to $1.17 after it sold another two of its properties for $20.7 million.

This is the second time in just over two months that the company has sold properties to pay off bank loans, having disposed of two vacant industrial sites near the Auckland International Airport for $2.9 million in August.

SkyCity (NZX: SKC ) rose 2.3% to $3.09, pacing gainers on the main board. Solly said the stock was still benefitting from the upbeat outlook the company delivered to shareholders at its AGM last week.

The company said that it was targeting a profit of at least $127.4 million in the 2011 financial year as earnings got off to a solid start in the first quarter, after normalised net profit rose 3.7% in the three months ended Sept 30 from a year earlier.

Ebos (NZX: EBO ) rose 2% to $7.50, Fisher & Paykel Appliances (NZX: FPA ) rose 1.7% to 61 cents, and Restaurant Brands (NZX: RBD ) rose 1.1% to $2.80.

Contact Energy (NZX: CEN ) rose 1% to $5.91 after the company won draft approval for its 250 Megawatt Tauhara geothermal power station project under the new Environmental Protection Authority.

The new plant will be the largest constructed for many years, and is likely to be built before the 220MW Te Mihi power station, in the Wairakei geothermal steamfield, for which Contact also holds resource consents.

Guinness Peat Group (NZX: GPG ) was unchanged at 72 cents after Mitr Phol Sugar, Thailand’s biggest sugar company, agreed to acquire the majority of GPG’s holdings in ASX-listed Maryborough Sugar Factor.

Mitr Phol would pay A$4 a share in cash for most of GPG’s holding, valuing a 19.9% stake at A$52 million. The deal is subject to review by Australia’s Foreign Investment Review Board.

Property for Industry (NZX: PFI ) was unchanged at $1.16 it reported after-tax earnings for the quarter of $13.7 million, up approximately 5% on the same period a year earlier, before counting the benefit of tax credits booked in the latest period.

Pacific Brands (NZX: PBG ) was unchanged at $1.40 after Australia’s biggest clothing maker said it had agreed to sell it Dunlop Foams and Sleepmaker businesses to Sleepyhead for a gross $55 million, and to acquire Sleepyhead’s Australian carpet underlay business, Wonderlay, for a nominal amount.

Kiwi Income Property Trust (NZX: KIP ) was unchanged at $1.05 after it signed a new nine-year lease with Beca Corporate Holdings for 14,000 square meters of office space at its Pitt Street property in Auckland.

 

Businesswire.co.nz



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