MARKET CLOSE: NZ shares mixed; Pike drops, MVN up

MARKET CLOSE: NZ shares mixed; Pike tumbles, Methven gains

August 25 – New Zealand shares were mixed, with Pike River Coal weighing on the NZX 50 Index after announcing further production delays at its South Island mine. Tapmaker Methven Ltd. led gainers, climbing to an 11 month high.

The NZX 50 rose 12.83, or 0.4%, to 3080.51. Within the index, 18 stocks fell, 24 rose and eight were unchanged. Turnover was a lower-than-average NZ$58 million. The benchmark index reached a 10-month high on August 14 and has slipped about 2.3% since then as investors digest earnings reports.

Pike River dropped 9.7% to NZ$1.03 after posting a NZ$13 million full-year loss as expected and said it has to seek an extension of conditions of its convertible bonds from Liberty Harbor because first coal shipments will be delayed until the first quarter of 2010.

“The delay doesn’t detract from the value of the business except for the cash flow and that was important to them,” said Ian Waddell, head of stockbroking at McDouall Stuart. “They’ve got quite a large staff down there are cash flow will become quite critical.”

Michael Hill International, the jewellery chain, fell 2.8% to 70 cents after reporting a 46% decline in earnings before interest and tax to NZ$20.1 million as the global downturn sapped demand for luxury items. Trading weakened in New Zealand and Canada while Australia “was more resilient,” chairman and founder Michael Hill said.

“Australia has probably saved them a lot,” Waddell said. “New Zealand is much tougher and will continue to be tougher.”

Methven Ltd. climbed 3.3% to NZ$1.55. The shares are rated a ‘buy’ based on the consensus of four analyst recommendations compiled by Reuters.

Vector Ltd., New Zealand’s biggest electricity and gas distributor, gained 0.5% to NZ$2.06 after full-year profit jumped 125%, reflecting a profit on the sale of its Wellington lines business and cost cutting. Earnings from continuing operations were NZ$164.9 million, beating the NZ$159 million median estimate in a Reuters survey.

AMP Ltd., the Australian insurer, rose 3% to NZ$7.58, tracking its ASX-listed shares higher. Sky City Entertainment Group rose 2.8% to NZ$3.35 and Hallenstein Glasson Holdings rose 2.5% to NZ$2.85.

ING Property Trust rose 1.4% to 74 cents after announcing a first-quarter cash distribution of 1.875 cents per unit.

Pyne Gould Corp. tumbled almost 10% to NZ$1.01 after the government extended the deposit guarantee scheme to December 2011 while imposing a sliding scale of fees for finance companies whose credit rating is junk, or below investment grade. Pyne Gould’s MARAC unit had its rating cut to BB+ from BBB- this month, with the outlook lowered to ‘negative’ from ‘stable.’

(BusinessWire)

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