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MARKET CLOSE: Charlie's deal bucks downbeat NZ market

Tuesday 19th October 2010

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New Zealand stocks fell for the first time in two sessions, led lower by Pike River Coal after the company cut its production forecast due to further delays in its hydro-mining operations. 

The NZX 50 Index fell 4.4 points, or 0.1%, to 3,257.93. Within the index, 18 stocks fell, 18 rose and 14 were unchanged. Turnover was $85 million.

However, the big news on the day was Charlie’s (NZX: CHA ) which rose 45.5% to a 28-month high of 16 cents after the company announced that it had closed a deal with Australian supermarket chain Coles, giving it national exposure in Australia’s billion-dollar juice market.

The juice company will have eight of its brands in 750 Coles outlets from early next month.

Pike River (NZX: PRC ) fell 11% to a near month low of $1.05 after the company said delays in underground road construction and equipment installation would push the bulk of its hydro coal shipments out into the 2012 financial year.

The news comes after the October 11 announcement it was on track to deliver its first 1,000 tonnes of hydro-mined coal and had completed 790 metres of roadway, which saw the stock rise 5.2% on the day.

“We’ve seen another disappointment from Pike River, which is no surprise given their track record,” said Karl Williscroft, a trader at Direct Broking. “I was pretty surprised at the bounce in their share price last week after one positive announcement. People seem to have been taken in by it, but one comment can’t change the shape of the company.”

New Zealand Oil & Gas Ltd., the energy exploration and production company that owns a 25% stake in Pike River and has chipped in substantial additional working capital in recent months, fell 3.8% to $1.28.

PGG Wrightson (NZX: PGW ) fell 5.1% to 56 cents, after managing director Tim Miles stepped down after two-and-a-half years in charge of the rural services group, effective immediately. Chairman John Anderson said the company’s new business model and direction meant the role would change, and Miles agreed that it was “an appropriate time for a change.”

Fletcher Building (NZX: FBU ) which recently won the contract to project manage Canterbury’s rebuild for the Earthquake Commission, fell 1% to $8.20 after the Commerce Commission said it had uncovered anti-competitive practices in the construction sector.

The commission said it won’t launch an investigation, but will investigate specific complaints if tabled. Under the Act, companies can be fined up to $10 million for each breach, or three times the value of any commercial gain or 10% of annual turnover.

Steel & Tube Holdings (NZX: STU ) fell 1.2% to $2.45. Tourism Holdings (NZX: STU ) fell 12.5% to 77 cents following yesterday’s announcement that it expects to post a first-half loss of up to $1 million as the strong kiwi dollar saps demand from British tourists.

Telecommunications Industry Group chief executive Rob Spray resigned today, and will not be replaced until the government releases its plan on Ultra Fast Broadband, according to a statement from the industry lobby group.

Telecom (NZX: TEL ), which is a founding member of the TIG, fell 0.5% to $2.06. NZ Farming Systems (NZX: NZS ) rose 3.4% to 61 cents, pacing gainers on the NZX 50.

Port of Tauranga (NZX: POT ) rose 1.8% to $7.30, Property for Industry (NZX: PFI ) rose 1.7% to $1.18, and ANZ (NZX: ANZ ) rose 1.7% to $31.22.

Air New Zealand (NZX: AIR ) rose 1.5% to $1.35 after it and Virgin Blue offered to increase seat capacity on six trans-Tasman routes, including three from Wellington, by 10% within three years, and 15% by the fifth year, in a bid to gain approval for their alliance from Australian anti-trust authorities.

New Zealand Aviation News editor Peter Clark said the Australian Consumer and Competition Commission risks showing protectionist tendencies if it rejects the rejigged trans-Tasman code sharing proposal.

SkyCity (NZX: SKC ) rose 1.4% to $2.96 after the company said it is looking to raise up to $50 million from a capital note sale.The company is selling the notes from its treasury stock, and will pay 7.25% per annum in quarterly instalments. The notes will mature in May 2015. First NZ Capital has been appointed to manage the offer.

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