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Wednesday 17th March 2010 |
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New Zealand shares fell, pushing the NZX 50 Index down for a second day, as Telecom sank to a new record low and a resurgent kiwi dollar damped the prospects for companies including Fisher & Paykel Appliances.
The NZX 50 fell 6.83, or 0.2%, to 3200.95. Within the index, 19 stocks fell, 16 rose and 14 were unchanged. Turnover was $93.2 million.
Telecom (NZX: TEL ), which this week put the three-year cost of the government’s rural broadband initiative at $168 million, declined 1.4% to $2.14, the lowest since it went public in July 1991, with 9.6 million shares changing hands.
“They have got a lot of headwinds and not just in this area,” said James Lindsay, who helps manage $450 million at Tyndall Investment Management. “I’m not really surprised that the stock’s under-performed.”
The nation’s biggest phone company is juggling issues including the fall-out from faults on its XT network, uncertainty about its role in the broadband and the continued migration of fixed-line customers to mobile. The tepid pace of the economy is also sapping earnings that have been eroded by compliance costs.
Lindsay said the equity market “looks reasonably fair value.” Many companies have been managing their costs well so they stand to benefit when the economy begins to grow again, he said.
The revival will likely be sluggish. Consumer confidence fell for a second quarter ion the three months ended March 31, according to the Westpac McDermott Miller Confidence Index, released today. Confidence fell to 114.7 from 116.9 in the fourth quarter of 2009, after reaching a four-year high figure of 120.3 in the September quarter.
Hallenstein Glasson Holdings (NZX: HLG ), the clothing chain, fell 1.7% to $3.46.
F&P Appliances (NZX: FPA ) fell 4.6% to 62 cents as the New Zealand dollar climbed above 71 U.S. cents, a two-month high. The kiwi also climbed against the currency of Australia, the nation’s biggest export market, to 77.49 Australian cents, the highest in almost three weeks. A high kiwi erodes the value of overseas sales.
Kathmandu Holdings (NZX: KMD ), which operates outdoor equipment stores in Australia and New Zealand, fell 1.8% to $2.19.
NZ Farming Systems Uruguay (NZX: NZS ), which develops dairy farms in South America, fell 2.6% to 38 cents.
NZX (NZX: NZX ) fell 1.5% to $1.95 as brokerage McDouall Stuart clarified its explanation its decision to resign as a trading and settlement member of NZX. It said inadequate future returns and a trend towards increased capital requirements for clearing house participants are behind its decision.
Diligent Board Member Services (NZX: DIL ) rose 2.1% to 49 cents after the online provider of services to boards of directors said it has secured a US$1 million line of credit from Spring Street Partners LP for the next 18 months. The shares have soared 370% in the past 12 months.
Sky City Entertainment Group (NZX: SKC ) rose 2.2% to $3.32, the biggest gain on the NZX 50 today. The casino company, in its interim report, reiterated that full-year earnings, excluding the one-time impact of the sale of its cinema chain, would climb 10% to 15%.
Speirs Group (NZX: SGL ) rose 12% to 28 cents, clawing back most of yesterday’s 14% decline. The food technology company that sold its finance business reported a first-half loss of $1.2 million, reflecting start-up costs of its Speirs Nutritionals omega-3 start-up and corporate governance costs. The shares trade infrequently.
New Zealand Refining (NZX: NZR ) edged up 0.8% to $3.64, adding to its 6.2% gain yesterday, when the nation’s only oil refinery announced that its refining margin recovered to US$6.85 per barrel in the first two months of the year, from as little as US$1 in December.
Businesswire.co.nz
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