MARKET CLOSE: NZ stocks fall; Hallenstein leads slide

MARKET CLOSE: NZ stocks fall; Hallenstein leads slide on profit downgrade, Sanford gains

By Jason Krupp

Jan. 26 (BusinessDesk) - New Zealand stocks fell for the second time in three sessions, with retailer Hallenstein Glasson Holdings leading the decline after downgrading its profit outlook, while Sanford Ltd. rose.

The NZX 50 Index fell 4.34 points, or 0.1%%, to 3354.72. Within the index, 18 stocks fell, 13 rose, and 19 were unchanged. Turnover was $48.4 million.

Hallenstein Glasson Holdings, the clothing retailer, fell 5.9% to $3.86, its lowest level in almost five months after it said net profit for the six months to Feb. 1 will probably come in the range of $7 million to $ 7.4 million, a decrease of 13% to 18% on the previous year's profit of $8.5 million. Group sales for the period are projected at $100.6 million, down from $102.321 million previously.

"People are getting their numbers together ahead of results season and finding them somewhat different from where they guided the market," said David Price, a broker at Forsyth Barr. "(Hallenstein) have been one of better performing retailers so it is looking rather ominous for the sector."

Air New Zealand, the national carrier, fell 1.4% to $1.43, after Prime Minster John Key said the government wants to partially list state owned enterprises on the NZX while still maintaining a majority stake and is reviewing its ownership of the airline

Air NZ said the move would have no influence on its operations but would provide greater liquidity for shareholders. Government currently holds a 76.5% stake in Air New Zealand.

Fletcher Building Ltd., New Zealand's biggest construction company, fell 0.1% to $7.89 after takeover target Crane Group released excerpts of an independent review of the hostile bid which labeled it "not fair and not reasonable".

Ernst & Young Transaction Advisory Services said fair market value of Crane was in the range of A$9.92 to A$11.56 per share, on a controlling and ex-dividend basis, but the fair market value of Fletcher's offer was in the range of A$9.05 to A$9.45 per share.

SkyCity Entertainment Group, the casino and hotel operator, fell 0.3% to $3.22 after Christchurch Casino said punter numbers had dropped in the wake of the Canterbury earthquake in September. SkyCity owns a 50% stake in the South Island's biggest gaming venue.

Restaurant Brands NZ Ltd., the fast food franchise operator, fell 0.4% to $2.43, after the NZX asked company to explain why its share price had declined over 10% since Jan. 10. The company was the second best performing stock on the exchange last year, having gain 64% in 12-months to peak at $2.68 at the end of last year.

Restaurant Brands did not give an explicit explanation for the fall, and said it "continues to comply with its continuous disclosure obligations".

Sanford Ltd., the fisheries company, rose 3.2% to $4.90 pacing gainers on the NZX 50. The company said its plans team up with rival Sealord to tap government funding for research and development into lifting the value of New Zealand mussel exports.

SmartPay Ltd., the EFTPOS services firm, rose 4.2% to 2.5 cents after managing director Ian Bailey said the company's plan to list on the ASX will give the company access to capital markets more willing to back small companies than in New Zealand.

The company was forced to make a series of off-market private placements to raise $2.28 million last September to repay debt and for working capital. At the time it cited difficulty in raising funds locally.

SmartPay yesterday announced management changes including the appointment of a new chief executive for New Zealand, giving Bailey more space to target the larger Australian market.

(BusinessDesk)

© Scoop Media