MARKET CLOSE: NZ stocks follow Aussie market lower

MARKET CLOSE: NZ stocks follow Aussie market lower on parity fears

By Jason Krupp

Sept. 30 (BusinessDesk) – New Zealand stocks fell for a third consecutive session, following the Australian market lower as speculation that the Australian dollar may reach parity with the greenback, creating issues for local exporters. Fletcher Building Ltd paced decliners after government figures showed a slump in August building consents.

The NZX 50 Index fell 48.8 points, or 1.5%, to 3,187.1. Within the index, 36 stocks fell, 5 rose and 9 were unchanged. Turnover was $127.7 million.

At the close of trade in New Zealand, the Australian dollar was selling at 96.65 U.S. cents, its highest level since July 2008, and the S&P ASX 200 Index was 0.9% down at 4,600.7.

“The talk today was all about forecasts that the Australian dollar is going to reach parity with the U.S. currency in 2011,” said Grant Williamson, a director at Hamilton Hindin Greene. “This is not a positive for exporters, and there has been a sell off on the Australian market which has flowed on into ours.”

Fletcher Building, New Zealand biggest construction company, fell 3.5% to $8.06, ending its recent rally as a precipitous decline in August building consents put pressure on the stock as it shed its dividend.

Statistics New Zealand said 1229 new housing units were given resource consent in August, a figure which included 36 new apartment units. Seasonally adjusted consents for new residential buildings, including apartments, fell 17.8% in August, after a 2.4% increase in July, according to data released by Statistic New Zealand today.

Prospects for New Zealand’s construction sector took a further turn for the worse after the latest National Bank of New Zealand Business Outlook survey showed that confidence levels in the commercial construction sector had declined to -8.3 points in September from 12.2 in the previous month.

Telecom Corp. fell 2.9% to $2.02 after New Zealand’s biggest telephone company told investors at its annual general meeting that the company would need to split in order to participate in the government’s ultra fast broadband scheme.

“Telecom’s CEO coming out and saying that the outlook is bearish doesn’t help investor confidence,” Williamson said. “However, most telcos around the world are starting to suffer somewhat, so it is not just Telecom feeling the effects of lower margins and increased competition.”

Pike River Coal Ltd., whose long-serving chief executive Gordon Ward leave next month, fell 0.9% to $1.13 after the company said it has agreed terms with 29% owner NZ Oil & Gas Ltd. for a $25 million short-term working capital facility that allows it to complete mine development. Pike will pay an interest rate of 13% for the facility, with establishment and monitoring fees of $600,000. The facility is repayable on Dec. 15. NZ Oil & Gas fell 1.6% to $1.27.

Sky Network Television, the pay TV operator, fell 2.2% to $4.95 after it announced this week that six internet providers have agreed to provide unmetered access to its forthcoming internet television service, iSky. The six include Vodafone, Orcon, Slingshot, Woosh, Xnet and Farmside.

Auckland International Airport Ltd. fell 15 to $2.05, after a business group opposing the sale of a 25 percent stake in Queenstown Airport to company said the deal "locks up" the tourist gateway's assets and is contractually too onerous, according to press reports.

The Queenstown Community Strategic Assets Group is also launching an advertising campaign in support of its legal proceedings, aimed at getting a new council to overturn the sale.

Goodman Fielder Ltd., the dual-listed food ingredients manufacturer, was unchanged at $1.81 after the company announced it is looking to raise as much as $250 million in a new NZX-listed bond to repay bank debt.

The company said it’s considering making an offer of up to $175 million of senior unsecured fixed rate bonds, with the ability to accept $75 million in oversubscriptions, and will decide on what interest rate it will pay before the offer is launched. Its facility with its lenders of A$700 million expires in November, and it’s already raised A$350 million from private investors in America.

NZ Farming Systems Uruguay Ltd., the South American dairy operator, rose 1.6% to 63 cents, pacing gainers on the NZX 50.

Vector Ltd., the gas and electricity distributor, rose 0.9% to $2.28, NZ Refining Co., the owner of New Zealand’s only oil refinery, rose 0.8% to $3.68, and Infratil Ltd., the investment management company, rose 0.6% to $1.78.

(BusinessDesk)

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