NZ share market loses traction in quiet session

By NZPA

Monday 27th November 2006

The New Zealand share market slipped as blue chip stocks declined in quiet trade.

The benchmark NZX-50 index closed down 17.65 points, or 0.5%, to 3831.70, after setting a record last week of 3857. Turnover was 26.3 million shares valued at $79.5 million, with falls outnumbering rises 77 to 39.

Telecom, which went ex-dividend today to the tune of 7cps, held up well to close down 8c at $4.47, while number two stock, Fletcher Building, lost a cent to $9.84.

"They've (the Government) said this afternoon that they're going to support the Mt Eden revamp, so that takes the edge off Fletcher Building," said Macquarie Equities head of broking, John Owen.

"But I think it doesn't matter whether it's waterfront or Mt Eden, there's still a lot of work for someone like Fletcher Building."

The Government has dropped the idea of building a new stadium at the Auckland waterfront for the 2011 Rugby World Cup, and is now backing the redevelopment of Eden Park stadium.

ABN Amro's downgrade to `hold', after Fletcher Building's recent strong share price rally, also weighed on the stock, Owen said.

Like Macquarie, ABN saw Fletcher Building as attractive to another company to buy, and worth up to $14.

Elsewhere among top-10 stocks, Fisher & Paykel Appliances rose a cent to $4.00, F&P Healthcare lost 12c to $4.30, and Auckland Airport was up a cent at $2.15.

Hallenstein Glasson shed 21c to $5.40 after issuing a profit warning in the lead-up to the crucial Christmas trading period.

" I think for all those stocks -- Hallensteins, even The Warehouse, Briscoes -- everyone's twitchy about how those sales are going to be," Owen said.

"It's too early to say how Christmas trading's going to look, but I think our view would be that you wouldn't expect it to be exceptional. It might just be fairly flat compared with last year."

The Warehouse fell 9c, or 1.3%, to $6.71, pressured by reports that founder Stephen Tindall is still considering his options but may sell his controlling stake in the company. Briscoe Group was up 3c at $1.72.

Hirequip fell 7c, or nearly 6%, to $1.11 after announcing the conditional sale of its hire business to a private equity company for $167 million, $50m above the unit's book value.

In Australia, shares rose 0.25% to 5467.3 as strong commodity prices boosted resource stocks, while Japan's Nikkei average rose 0.44% despite falls in top exporters following a sharp jump in the yen.

US stocks dropped on Friday as a steep fall in the dollar renewed inflation worries in a short session after the Thanksgiving holiday, but losses were partly offset by mining shares after gold prices climbed.

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