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MARKET CLOSE: Shares fall, led by Air NZ and SkyCity

Wednesday 8th September 2010

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New Zealand shares ended a five day winning streak as a combination of global uncertainty and the fallout from the Christchurch earthquake kept investors on the sidelines.

Air New Zealand and SkyCity led the bourse lower after the stocks went ex-dividend.

The NZX 50 fell 12.9 points, or 0.4%, to 3,161.2. Within the index 24 stocks fell, 12 rose and 14 were unchanged. Turnover on the day was $76.3 million.

“It has been a big week with the Christchurch earthquake, the Australian political situation and the European banks, and uncertainty seems to be keeping investors on the sidelines,” said Karl Willscroft, a trader at Direct Broking. “As a result volumes have been light, and in that kind of market it doesn’t take much of a movement to move the market one way or the other.”

Air New Zealand (NZX: AIR ) fell 5.1% to $1.28 after the airline paid a final dividend of 4 cents a share, pacing decliners on the day. The national carrier said yesterday it was slashing the cost of lead-in economy fares, and introducing four new in-flight product options for customers on flights between New Zealand, Australia and the Pacific Islands.

SkyCity (NZX: SKC ) fell 3.4% to $2.87 after paying its 9.25 cent final dividend.

Shares in AMP (NZX: AMP ) fell 2.6% to $6.41 after rating agency Fitch Rating said Australia’s non-life insurers’ reinsurance costs are likely to rise in the wake of the Christchurch earthquake, with Fitch putting the bill somewhere between $1.5 billion and $6 billion.

Treasury Secretary John Whitehead put the cost of damage caused by the 7.1 magnitude quake in the “ball-park” of $4 billion, and told a media conference in Wellington the department is still assessing the impact on production and replacing assets.

Steel & Tube (NZX: STU ) rose 0.8% to $2.42 and Fletcher Building (NZX: FBU ) rose 0.1% to $8.16, with both companies gaining this week.

Shares in ING Property Trust (NZX: ING ) were unchanged at 71 cents after the company announced the sale of a retail property in Manukau and the acquisition of another in St Lukes. The Auckland properties are both valued at $10.5 million. The sale of the Manukau property was ahead of its $10.25 million book value, but down on the $16.4 million it paid in 2007. Sister company ING Medical Trust rose 0.8% to $1.23.

Goodman Fielder (NZX: GPT ) rose 2.3% to $1.79, pacing gainers on the day. Cavalier (NZX: CAV ) rose 1.2% to $2.65, and Abano Healthcare (NZX: ABA ) rose 1% to $5.15.

OceanaGold (NZX: OGC ) rose 1.3% to $4.80, after chief executive Paul Bibby resigned, citing personal reasons. Chairman Jim Askew will become executive chairman in the interim while the gold miner searches for a permanent replacement.

L&M Energy (NZX: LME ) rose 9.5% to 13 cents after the company announced yesterday that it had raised $1.4 million in a share purchase plan, adding to its placement in July. Some 15% of the company’s shareholders participated in the offer, buying shares at 9 Australian cents on the ASX and 11 cents on the NZX.

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