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MARKET CLOSE: NZ stocks fall as kiwi dollar pressures exporters, FPH and NPX fall

Friday 5th November 2010

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New Zealand stocks fell for a second session, as the kiwi dollar’s ascent to the 29-month high sapped enthusiasm for companies dependent on export earnings such as Fisher & Paykel Healthcare and Nuplex.

The NZX 50 Index fell 7.09 points, or 0.2%, to 3,319.15. Within the index, 12 stocks fell, 19 rose and 19 were unchanged. Turnover was $104.7 million.

The kiwi dollar traded just below the 80 US cent level for much of the day, driven by a weakening greenback and better-than-expected local jobs data.

“It looks like the currency is starting to weigh on market,” said Grant Williamson, a director at Hamilton Hindin Greene. “We’re heading up to highs we last saw 2008 where we got to just over 81 US cents, which is of course putting pressure on the export sector.”

F&P Healthcare (NZX: FPH ), which makes about 80% of its sales of breathing devices and respirators in US dollars, fell 3.5% to $3, while Nuplex (NZX: NPX ) fell 2.3% to $3.47.

Michael Hill (NZX: MHI ) fell 3.8% to 77 cents, pacing declines on the NZX 50 after it said its foray in the North American market had cost the company $9.5 million.

The company closed seven stores this year, mostly in the US as credit tightened up, but said it still planned to roll out 63 more over the next three years, largely in Canada and Australia.

Telecom (NZX: TEL ) fell 1.9% to $2.07 after it reported a 37% decline in first-quarter profit and chief executive Paul Reynolds said growth in sales of mobile, broadband and IC services "is only partially offsetting declines in traditional fixed line and voice services."

Earnings before interest, taxation, depreciation and amortisation rose 3.6% to $463 million in the three months ended Sept 30, reflecting a reduction in operating costs, the company said today.

TrustPower (NZX: TPW ) fell 2.8% to $7.18 after yesterday reporting a 28% decline in net profit to $59.7 million for the six months to Sept 30.

The company said results in the period were hampered by low spot electricity prices due to high hydro inflows and storage, as well as intense competition for residential customers on the South Island.

Infratil (NZX: IFT ) the investment holding company which owns 50.5% in TrustPower, was unchanged at $1.82.

Goodman Fielder (NZX: GFF ) rose 2.1% to $1.97, leading gainers on the main board of the exchange, while Kathmandu (NZX: KMD ) rose 1.7% to $1.80, and Guinness Peat Group (NZX: GPG ) rose 1.4% to 74 cents.

Vital Healthcare Property Trust (NZX: VHP ) rose 1.6% to $1.28, and Property for Industry (NZX: PFI ) rose 0.9% to $1.19.

Briscoe (NZX: BGR ) rose 2.1% to $1.46 after third-quarter sales rebounded strongly from a weak second quarter.

Sales rose 6.5% to $89.8 million in the three months ended October 31 with same-store sales rising 6.1%. Second quarter same-store sales fell about 2%.

TransPacific Industries (NZX: TPI ) was unchanged at $8.65 after its ERS New Zealand unit paid a “significant sum” in a settlement to head off a price-fixing prosecution.

The Commerce Commission agreed to withdraw High Court proceedings lodged in 2009 against New Zealand’s largest provider of waste oil services after a whistleblower gave the regulator a secret recording of a meeting where one of ERS’ directors discussed future price rises with a rival. Shares last traded in March.

APN News & Media (NZX: APN ) was unchanged at $2.40 after PMP Print, which produces catalogues, magazines, books, directories and newspapers, said it has applied to the Commerce Commission for clearance to buy the company’s heat set printing assets.

Both parties are presently offering heat set printing services to magazine and catalogue publishers, and the Commission’s role is to determine whether competition will be substantially lessened.

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