NZX CLOSE: Shares mixed; NZ Refining, WHS rise, Telecom gives up gains

Tuesday 23rd March 2010

New Zealand shares were mixed, with New Zealand Refining leading advancers as investors await news of Infratil Ltd.’s talks to buy Shell Group assets including 17% of the refiner. Warehouse Group rose after saying its bond sale was two times over-subscribed while Telecom Corp. gave up early gains after further outages on its XT network.

The NZX 50 Index fell 4.93, or 0.2%, to 3228.28. Within the index, 15 stocks fell, 20 rose and 15 were unchanged. Turnover was $71.9 million.

NZ Refining (NZX: NZR ) climbed 7.7% to $4.20, the highest close this year. The shares have climbed steeply since the nation’s only refinery last week said its refining margins recovered to US$6.85 per barrel in the first two months of the calendar year, having sunk to rock-bottom lows of US$1 in late 2009. Infratil, which has said it is confident of reaching agreement with Shell over its New Zealand assets, rose 0.6% to $1.66.

Warehouse (NZX: WHS ) rose 1.3% to $3.98. The biggest retailer on the NZX 50 today said it won’t have a public pool for its five-year bonds, because clients of bookbuild participants had snapped up the lot. The company aims to use the funds to expand its chain of stores and widen its product range.

“Things aren’t in bad shape,” for the retail sector at the moment, said Craig Brown, who helps manage $3.3 billion at ING New Zealand Ltd. Still, demand for the bonds isn’t necessarily an indication that the company has taken a turn for the good, as some investors are simply seeking a reliable income stream from a fixed-interest security.

Contact Energy (NZX: CEN ), the largest utility on the NZX 50, slipped 0.2% to $6.10. Environment Minister Nick Smith today announced that the company’s 240MW Tauhara 2 geothermal generation proposal has become the first to have a power station proposal referred to an independent board of inquiry under the fledgling Environmental Protection Authority. The new rules ensure a speedy hearing for the consent, with reduced rights of appeal from other parties for projects of national significance.

Telecom (NZX: TEL ) ended the session unchanged at $2.14 having traded 2% higher during the day. The phone company’s XT network crashed today, disrupting customers’ phone calls, text messaging and data use. The shares are trading near their lowest levels since the early 1990s.

“It’s difficult to see it as being a compelling investment at the moment,” despite the low values, ING’s Brown said. “I think investors are holding off to get comfort before they invest.”

Salvus Strategic Investments (NZX: SAM ) rose 1.3% to 80 cents after announcing that Milford Asset Management director Brian Gaynor has been appointed to the board. Earlier this month Milford purchased 16.92% of Salvus for about $2.5 million from Hubbard Churcher Management Ltd, a vehicle related to South Canterbury Finance and its owner, Allan Hubbard. Salvus has climbed almost 60% in the past 12 months.

Pyne Gould Corp (NZX: PGC ) was the biggest decliner today, sliding 2.1% to 47 cents. Sky City Entertainment Group (NZX: SKC ) fell 2.1% to $3.31. Freightways (NZX: FRE ), the courier firm, rose 3.2% to $3.20.

Businesswire.co.nz

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