NZ stocks fall for first day in 3, Rakon drops

Published: Mon 8 Dec 2008 09:40 AM
Market Close: NZ stocks fall for first day in 3, Rakon drops
Dec. 5 – New Zealand stocks fell for the first day in three, led by Rakon and Tourism Holdings amid speculation the economy will take longer to revive than the central bank is projecting.
The NZX 50 fell 23.96, or 0.9%, to 2706.72 as at the 5 p.m. close of trading in Wellington, bringing its decline this year to 33%. Within the index, 31 shares fell, 13 rose and six were unchanged. Rakon fell 7% to NZ$1.30 and are down 25% in the past month. Tourism Holding fell 7% to 65 cents.
In Australia, the S/ASX 200 Index fell 0.1% to 3527.4 in late afternoon trading. Babcock & Brown tumbled 31% to 27.5 cents. Japan’s Nikkei 225 Index gained 0.3% to 7943.66.
“Things are still very tough, take a look around and there's so much collateral damage,” said Ian Waddell, managing principal at brokerage Waddell Johnston McCarthy. Investors “who were bottom-fishing were all slaughtered.”
Shares extended their decline after Finance Minister Bill English said the nation’s budget deficits will probably widen next year as the global economic slump slows tax revenue and the government brings forward spending on infrastructure.
“2009 is going to be a challenging year for everyone, including the government - our books are going to get worse before they get better,” Finance Minister Bill English said in a statement.
New Zealand Oil & Gas fell 3% to NZ$1.24, trimming its gain this year to 10% after the price of crude oil fell below US$44 a barrel. Crude oil may fall below US$25 a barrel in 2009 should the global downturn drive China’s economy into recession, according to a Merrill Lynch report.
Sky Network Television rose 7.3% to NZ$3.70 as some investors picked it as a company that will maintain its dividend payments.
Fletcher Building rose 1.3% to NZ$5.62 on optimism lower mortgage rates may help revive interest in the property market. Reserve Bank Governor Alan Bollard yesterday slashed the official cash rate by 150 basis points to 5%, prompting banks including Westpac, ASB and Kiwibank to reduce variable and short-term fixed rate home loans.
Fisher & Paykel Appliances Ltd. declined 5.6% to NZ$1.35. Hallenstein Glasson Holdings rose 0.9% to NZ$2.32. retailers are hoping for a bumper Christmas season to help stoke annual sales growth.
“We'll have a better idea in January and February, when people get their credit card bills," Waddell said.

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