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MARKET CLOSE: NZ stocks fall as investors sell FBU, recent gainers

Friday 24th September 2010

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New Zealand stocks fell for a third consecutives session as investors sold their holdings in Fletcher Building to book profit on its 9.2% gain since the Canterbury earthquake.

The NZX 50 Index fell 16.9 points, or 0.5%, to 3,211.2. Within the index, 22 stocks fell, 11 rose and 17 were unchanged. Turnover was $112.9 million.

Fletcher Building (NZX: FBU ) fell 1.9% to $8.46. Earlier in the week the stock reached $8.66, the highest level since May 2008.

“Fletcher rallied strongly as a result of the earthquake, but it is going to take a while before they benefit from that that,” said Grant Williamson, a director at Hamilton Hindin Greene. “Today we’ve seen investors taking the opportunity to cash in on their profits now.”

Restaurant Brands (NZX: RBD ) fell 2% to $2.51, having also hit an all time high record price of $2.61 this week after reporting growth in second-quarter sales.

Williamson said the company has been one of the best performing stocks on the market in the last couple of years, and was “definitely a candidate for profit taking today”.

NZ Refining (NZX: NZR ) fell 4% to $3.60, pacing declines on the day.

Air New Zealand (NZX: AIR ) fell 0.8% to $1.28, after chief executive Rob Fyfe said the Australian antitrust regulator risks ‘killing off’ competition by vetoing the airline’s trans-Tasman alliance with Virgin Blue Holdings.

The Australian Consumer and Competition Commission’s decision leaves the dominant power of Qantas and its cut-price subsidiary Jetstar “completely unchecked,” chief executive Fyfe told shareholders at their annual meeting in Auckland.

AMP (NZX: AMP ) fell 2.26% to $6.50, and Warehouse Group (NZX: WHS ) fell 2% to $2.51.

Shares in Postie Plus (NZX: PPG ) were unchanged at 32 cents after the company reported a 6.5% drop in full-year pretax earnings, and said retailing will continue to struggle through to Christmas though better trading in 2011 should lead to resumption in dividends. Earnings before tax fell to $781,000 in the 12 months ended August 1, from $835 million a year earlier, the Christchurch-based retailer said in a statement. Net income tumbled 33% to $415,000, reflecting an adjustment for deferred tax.

APN New & Media (NZX: APN ), which publishes the NZ Herald and operates the Radio Network, rose 6.2% to $2.56, pacing gainers on exchange. Its shares rose 0.5% on the ASX, its primary listing.

Guinness Peat Group (NZX: GPG ) rose 1.5% to 68 cents. The stock has risen since the company named four independent directors in a boardroom shakeup aimed at reappraising strategy at the under-performing investment company.

Kathmandu (NZX: KMD ) rose 0.6% to $1.78 after the company posted annual earnings that missed its prospectus forecast after weaker second-half trading.

Net income fell to $9.4 million in the 12 months ended July 31, from $14.9 million a year earlier, the company said. Earnings before interest and tax of $47.5 million missed its forecast of $50.6 million.

“The company said it was confident of an improvement in profitability going forwards so there were some positives for investors on that announcement,” said Williamson.

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