MARKET CLOSE: NZ stocks fall; Pyne Gould paces decliners

MARKET CLOSE: NZ stocks fall; Pyne Gould paces decliners, Wrightson gains

By Jason Krupp

Jan. 20 (BusinessDesk) New Zealand stocks fell, as investor appetite for higher yielding or riskier assets shrank amid signs that China will need to start aggressively clamping down on inflation after GDP figures came in higher than expected. Pyne Gould Corp. fell and PGG Wrightson Ltd. rose.

The NZX 50 Index fell 6.73 points, or 0.2%, to 3339.28. Within the index 20 stocks fell, 19 rose, and 11 were unchanged. Turnover was $67.8 million.

China, the world's second-biggest economy, today reported economic growth accelerated to 9.8% in the fourth quarter, beating consensus forecasts of 9.4%. The numbers add pressure on mainland authorities to continue tightening monetary policy to counter inflation.

"We're following the leads from offshore markets but there does seem to be a bit of an overreaction (to the data)," said Stuart Hardie, an adviser with Craigs Investment Partners. "We're starting to get into reporting season, and I wonder if people have taken this as an opportunity to take some money off the table."

Pyne Gould Corp., the finance company whose Marac unit merged with the Southern Cross and Canterbury building societies to form Building Society Holdings Combined Building Society Ltd., fell 2.7% to 36 cents.

Earlier this week former CBS Canterbury chief executive Bryan Inch announced he is stepping down as head of retail banking at the so-called "Heartland Bank" just days after assuming the post. Inch's departure, which is effective on Jan. 31, comes on the same day that Combined Building Society will list on the NZX.

Fletcher Building Ltd., New Zealand's biggest construction company, fell 0.8% to $7.79, after the Commerce Commission flagged potential concerns with its proposed takeover of Australia's Crane Group, relating largely to an overlap in the manufacture and supply of pipes and piping systems.

Wrightson rose 1.9% to 54 cents, pacing gainer on the NZX 50.

The rural services company is facing a takeover offer from Chinese agricultural and seeds researcher Agria which is looking to boost its holdings to just over half, with an offer of 60 cents a share.

Goodman Fielder Ltd., the food ingredient manufacturer, rose 1.8% to $1.72, regaining some of the ground it lost when chief executive Peter Margin announced his resignation this week. The move came hot on the heels of David Goldsmith's resignation as chief financial officer late last year.

Kathmandu Holdings, the outdoor clothing retailer, rose 1.5% to $2.08, a day after it said net profit is likely to rise by as much as 26% to between $18.5 million and $19.5 million for the six months ending Jan. 31 on the back of stronger earnings.

"It's great to have a great retail stock like Kathmandu on the market," Hardie said. "Looking to this year and next we need to have more good New Zealand companies like this listing on our market."

Hallenstein Glasson Holdings, the clothing chain, rose 1.2% to $4.10, and Michael Hill International Ltd., the jewellery retailer, rose 1.1% to 91 cents.

Retail stocks also received a boost after consumer confidence bounced back in January as people were more optimistic during their summer holidays, and willing to take advantage of seasonal sales.

The ANZ-Roy Morgan Consumer Confidence Survey rose 5 points to 117.1 this month, as households enjoyed the summer sales amid deep discounting by retailers struggling to attract customers.

The current conditions index gained 7 points to 105.2, led by a net 20% of respondents saying now was a good time to buy compared to a net 10% last month.

(BusinessDesk)

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