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MARKET CLOSE: NZ shares join Asia sell-off; PPL falls, NZX gains

Tuesday 26th October 2010

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New Zealand shares ended the day lower, joining a sell-off across Asian equity markets as investors fretted about the impact of a week greenback on export earnings. Pumpkin Patch fell and NZX gained.

The NZX 50 Index fell 4.304, or 0.1%, to 3285.442. Within the index, 23 stocks rose, 12 fell and 15 were unchanged. Turnover was a higher-than-average $129.3 million, reflected turnover in Telecom, Fisher & Paykel Healthcare and Fletcher Building.

Japan’s Nikkei 225 Index was lower during much of New Zealand’s trading day, before picking up. Australia’s S&P/ASX 2000 Index fell 0.5%.

Pumpkin Patch shed 2% to $1.96, while New Zealand Refining declined 2.7% to $3.60.

“Asian markets were a bit weaker today and we’ve tracked slightly lower,” said Grant Williamson, director at Christchurch-based brokerage Hamilton Hindin Greene.

NZX rose 2.6% to $1.59 a day after Australian rival ASX soared 19% on the back of a takeover offer at a steep premium from the Singapore stock exchange. ASX gave up some of its gains, slipping 6% today.

“ASX has been valued on very high multiples and that’s rubbed off for some investors in NZX,” Williamson said. Still, the Singapore offer has to navigate the approvals process across the Tasman, where ASX may be deemed an asset of national importance. “There’s a lot of water to go under the bridge.”

Kathmandu (NZX: KMD ) rose 3.3% to $1.90, leading gainers on the NZX as the kiwi dollar weakened against its Australian counterpart, creating an arbitrage opportunity between its shares on the ASX and NZX.

The New Zealand dollar sank to 75.87 Australian cents, and earlier touched 75.56 cents, nearing a 10-year low.

New Zealand Oil & Gas (NZX: NZO ) gained 1.6% to $1.28 as problems at the Pateke-3H well were solved over the long weekend. The oil and gas explorer has a 12.5% share in the Tui fields with AWE, Mitsui E&P Australia, and Pan-Pacific.

Shares in coal seam gas explorer L&M Energy (NZX: LME ) rose 7.1% to 13.5 cents after the company boosted its gas reserves at its western Southland basin permit.

Port of Tauranga (NZX: POT ) was unchanged at $7.25 after the company’s chief executive Mark Cairns gave shareholders an upbeat earnings assessment. The port expects to meet analysts’ forecasts with earnings of between $51 million and $53 million.

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