MARKET CLOSE: NZ stocks slip on global recession fears; Rakon paces decliners, Vector rises
By Jason Krupp
Sept. 5 (BusinessDesk) - New Zealand stocks fell, kicking off a slump on Asia Pacific markets after U.S. jobs growth
stalled in August and on signs Europe's debt crisis may be worsening, sparking fresh fears that the global economy is
headed for another recession. Rakon Ltd. paced decliners and Vector Ltd. rose.
The NZX 50 Index fell 10.73 points, or 0.3%, to 3,292.48, its lowest level since Aug. 24. Within the index, 25 stocks
fell, 11 rose, and 14 were unchanged. Turnover was $105.7 million.
The kiwi dollar fell to 84.42 U.S. cents as at 5pm, paring losses when it traded at 84.36 cents at 8am, though still
down from 85.03 cents on Friday in New York. It fell to 72.66 on the trade-weighted index of major trading partners'
currencies from 72.88 this morning.
Asia Pacific markets were mired in the red in afternoon trade on Monday, with the Nikkei 225 Index down 1.9%% to
8,781.94, Hong Kong's Hang Seng Index down 2.2% to 19775.01, and Australia's S 200 Index down 2.5% to 4,137.60.
Rakon, the maker of crystal oscillators used in electronic devices, fell 2.5% to 78 cents, with the stock getting
hammered for a fourth day after it said annual operating profit could fall as much as 44% for the year ending March 2012
if the New Zealand dollar remains are current level. The stock has lost 8.2% since the announcement on Aug. 31.
With earnings projections "normally the rule is three strikes and you’re out and they've a few more than that," said
David Price, a broker at Forsyth Barr in Wellington. "Their profit forecasting and hitting target hasn't been very good,
so people are just moving on, although it's unfortunate that it’s the currency headwind that they're facing."
Local banking stocks fell, taking their lead from their listed parents in Australia, with Westpac Banking Corp., the
Australian lender, falling 2.8% to $25.04 on the NZX. Australia & New Zealand Banking Group, the country's biggest lender, fell 2.6% to $24.35.
PGG Wrightson Ltd., the rural services company, fell 2.2% to 45 cents. The government today announced that it was
withdrawing the company's finance unit from the Crown Deposit Guarantee scheme after it was acquired by would-be bank
Heartland New Zealand, who's guarantee will now cover the PGG Wrightson Finance Ltd.
Heartland, who also announced that its guarantee had been extended to December 31, was unchanged at 57 cents.
Vector, the Auckland electricity and gas distributor, rose 2% to $2.52, leading gainers on the exchange. The stock is
rated as 'hold' according to the consensus view off five analysts polled by Reuters.
New Zealand Oil & Gas Ltd., the energy exploration and production company, rose 1.5% to 68 cents.
Sky Network Television Ltd., the pay TV operator, rose 1% to $5.86, with stock continuing to attract investor attention
after the company's board declared final dividend of 10.5 cents per share plus a special dividend of 25.0 cents per
share.
Property for Industry, the specialist investor in commercial and industrial properties, rose 0.9% to $1.18.
Port of Tauranga Ltd., the country biggest port, rose 0.8% to $9.96.
(BusinessDesk)