MARKET CLOSE: NZ stocks fall on sovereign, China policy concerns, PGC drops
By Jason Krupp
Nov. 17 (BusinessDesk) – New Zealand stocks fell for a second day, as investor risk appetite waned on concerns over
Europe’s sovereign debt and policy tightening in China continued to stalk global markets. Pyne Gould Corp. paced
decliners, while Vector Ltd. led gains.
The NZX 50 Index fell 25.75 points, or 0.78%, to 3,289.3. Within the index, 35 stocks fell, five rose and 10 were
unchanged. Turnover was $108.1 million.
In Asia, stocks markets traded mostly lower after reports that China was considering implementing food price controls
and limits on commodity speculation to rein in inflation, while in Europe the continued standoff between Ireland and
euro zone member over a bail out continued to fuel uncertainty in the market. In afternoon trade the Shanghai Composite
Index fell 1.1% to 1,178.34.
“One of the further ramifications of those two developments is the impact that this has on currencies and in turn
commodities, remembering that the theme of the falling U.S. dollar and rising commodities underpinned much of the
activity that went on recently,” said Angus Gluskie, a director at White Funds Management in Sydney.
Pyne Gould, the financial services company vying to become a bank, fell 4.8% to 40 cents after shedding its 1.5
cents-a-share special dividend. The financial services company said this week it plans to distribute most of its stake
in the proposed South Island bank if the merger between Marac, CBS
Canterbury and Southern Cross Building Society proceeds.
PGG Wrightson Ltd., the rural services company, fell 4% to 48 cents, and Kathmandu Holdings, the outdoor clothing
retailer, fell 3.7% to $1.57 after going ex-dividend.
Telecom Corp., New Zealand’s biggest telephone company, fell 4.1% to $2.11. The company today said it cancelled its
dividend reinvestment scheme for the first quarter dividend because of share price uncertainty created by the delayed
announcement of preferred partners for the government’s ultra-fast broadband project.
The potential for the imminently expected government UFB announcement to move the share price has prompted the cautious
approach, a Telecom spokesman told BusinessDesk.
Vector, the network utility company, rose 1.2% to $2.54, pacing gainers on the main board. Goodman Property Trust, the
commercial and industrial properties owner, rose 1% to 98 cents, Mainfreight Ltd., the integrated logistics company,
rose 0.5% to $7.40, and New Zealand Refining Company, which operates New Zealand’s only oil refinery, rose 0.3% to
$3.76.
Fletcher Building Ltd., New Zealand’s biggest construction company, rose 0.9% to $8.01 after chairman Ralph Waters told
shareholders at their annual meeting that rebuilding Canterbury after the earthquake and the government programme to fix
leaky homes will be the impetus for growth in the construction industry.
Profit in 2011 may be around $357 million, matching the average of analyst forecasts, from $301 million excluding a
one-time tax charge last year.
Windflow Technology Ltd., the Christchurch-based wind turbine manufacturer, fell 3.4% to 85 cents, after it said it saw
fat margins both for itself and for the Scottish farmers it is targeting under a British government subsidy scheme to
encourage small-scale wind generation.
The emergence of the British scheme has thrown Windflow both a lifeline, as it has no forward orders beyond its sole
customer, Te Rere Hau windfarm, where construction is almost complete, and a large, previously unexpected sales
opportunity.
Dorchester Pacific Ltd., which kept receivers at bay by convincing investors to swap their debt securities for a
grab-bag of new securities, was unchanged at 11 cents, after it posted a first-half profit after making fair-value
adjustments.
Profit was $15.7 million in the six months ended Sept. 30, from a loss of $8.5 million a year earlier, the company said
in a statement. Operating revenue tripled to $33.8 million, with $29 million coming from an item described as “Fair
value adjustment – capital raising & capital reconstruction.”
(BusinessDesk)