MARKET CLOSE: NZ stocks fall; Hallenstein leads decline

MARKET CLOSE: NZ stocks fall; Hallenstein paces decliners as revenue stalls

By Jason Krupp

Dec. 7 (BusinessDesk) - New Zealand stocks fell. Hallenstein Glasson Holdings paced decliners after higher sales taxes and softer demand eroded revenues, while Pyne Gould Corp. rose.

The NZX 50 Index fell 11.32 points, or 0.3%, to 3,281.85. Within the index, 22 stocks declined, 16 gained and 12 were unchanged. Turnover was $87.8 million.

Hallenstein, the clothing retailer, fell 3.1% to $4.07 after it told share holders at its annual meeting that sales had stalled for the first four months of the financial year as a hike in local consumption tax and rising Australian interest rates cut demand, with market conditions likely to remain challenging.

Chairman Warren Bell told shareholders that sales growth of 5% in August and September was followed by weak consumer demand in October and November, leaving four-month sales unchanged from a year earlier. Tougher competition is putting the company’s margins under pressure, he said.

"They're seeing challenging conditions ahead, and the market has taken that as slightly negative and sold it off," said Grant Williamson, a director at Hamilton Hindin Greene. "They've certainly been one of better retailers on a performance level for quite a few years, so if they’re finding it difficult you know it's tough."

Telecom Corp., New Zealand biggest telephone company, fell 1.4% to $2.15 after government awarded two more franchises in its ultrafast broadband rollout, reducing the phone company's prospects of winning a stake in the project.

Crown Fibre Holdings today said NorthPower was selected to provide the service for the Whangarei area and Ultra Fast Fibre, a unit of WEL Networks, won Hamilton, Tauranga, Cambridge, Te Awamutu, Tokoroa, New Plymouth, Hawera and Wanganui.

"We had the first announcement from government on broadband today but of course it wasn't the big boys involved," Williamson said. "People seem to be getting a bit frustrated; they want to get to the shortlist by now."

New Image Group, which makes health tonics based on bovine colostrum, rose 4% to 26 cents bought Auckland-based biotechnology company Somnaceutics Limited and its patents on natural sleep-enhancing milk product.

New Image executive chairman Graeme Clegg said the acquisition is part of accelerating New Image's development of natural products that are scientifically based and clinically proven.

SkyCity Entertainment Group fell 0.3% to $3.18 after reports in the press claimed the casino and hotel operator had made another offer in excess of $100 million for the remaining stake in Christchurch Casino.

Skyline Enterprises, which owns 50 percent the venture, had previously rebuffed several offers from SkyCity, the most recent of which was in November.

Pyne Gould rose 2.7% to 38 cents, leading gainers on the NZX 50 after Southern Cross Building Society investors voted in favour of merging with the financial service company's Marac unit and Canterbury Building Society.

The vote came after last month’s meeting failed to meet a quorum and today’s tick means only CBS and Marac debenture holders are left to give the deal approval. It already has the support of Marac unit holders, and shareholders in PGC and CBS.

OceanaGold Corp., the mineral prospecting company, rose 3.5% to $4.50 after it extended drilling at its Reefton mine on the West Coast after positive results from its exploration programme.

Australia and New Zealand Banking Group rose 1% to $30.50 after its local unit said it plans to lend $3 billion to small and medium-sized businesses in 2011, on top of the expected $3.5 million needed to refinance existing customers.

Oyster Bay Marlborough Vineyards Ltd., the grape grower, was unchanged at $1.85 after Delegat’s Wine Estate Ltd. increased its stake in the company to 74% as part of a takeover offer valued at $2.08 a share.

New Zealanders’ spending rose last month as retailers gear up for the Christmas trading season. The value of spending rose 5.5%, or $3.78 billion in November from the same month a year earlier, according to data from Paymark, which processes about three-quarters of all electronic transactions.

That’s up from 3.3% in October and is the second month capturing the government’s hike in goods and services tax. The volume of trades rose 5.6% last month.

(BusinessDesk)

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