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NZX 50 falls, Fletcher down on building stats

Published: Tue 9 Dec 2008 11:15 AM
MARKET CLOSE: NZX 50 falls, Fletcher down on building stats
Dec. 8 – New Zealand stocks fell for a second day after figures showed weakening house prices and construction activity, helping drive Fletcher Building lower.
The NZX 50 Index slipped 6.911, or 0.3%, to 2699.81. Within the index, 26 stocks rose, 13 fell and 10 were unchanged. The index has gained about 4.8% since reaching a more-than four-year low on Nov. 24.
“You can look at the fundamentals of New Zealand and say there’s a bit of a base forming,” said Mark Peterson, managing director of Direct Broking, the nation’s fourth-biggest brokerage by volume of trade. Still, the base is “very, very thin and the economy of New Zealand probably has got quite a lot of its cycle to roll through.”
Fletcher fell 4.3% to NZ$5.38, trading near a four-year low. New Zealand residential building work fell 7.9% in the third quarter, according to Statistics New Zealand. Total construction work, adjusted for inflation, fell 2.1% from the second quarter. Shamubeel Eaqub, economist at Goldman Sachs JBWere, said the construction industry may shed as many as 35,000 jobs as the slump continues.
Reserve Bank Governor Alan Bollard predicted the economy shrank 0.3% in the third quarter, extending its first recession since 1998, when he slashed the official cash rate by a record 150 basis points last week. The nation’s jobless rate rose to a five-year high of 4.2% in the third quarter and some economists say it will reach 6%.
Tourism Holdings fell 4.6% to 62 cents. New Zealand’s biggest campervan rental company last month said profit will fall this year as consumers cut back on discretionary spending and tourist numbers weaken.
Nuplex Industries, a manufacturer of resins and ingredients used to make paint, printing ink and adhesives, fell 2.4% to NZ$3.30. The stock has plunged since the company last month cut its earnings forecast for 2008/09 by as much as $25 million, citing weak demand in October and November.
Ryman Healthcare rose 3.3% to NZ$1.55. Last month, the biggest retirement home investor on the NZX 50 posted a 10% gain in first-half profit as it opened new villages amid rising demand.
Westpac Banking Corp. shares rose 4.6% to NZ$21.60, tracking a rally in Australian banks amid optimism more companies will seek loans as the credit freeze slowly thaws. Australian insurer AMP climbed 4% to NZ$6.45.
Rakon rose 7.7% to NZ$1.40. The shares are still down 18% from their level before the company’s Nov. 14 announcement that first-half profit had slumped 66% and second-half earnings would be the same or worse.
In Sydney, the S/ASX 200 Index rose 4.3% to 3640.2 in late afternoon trading. Shares of Santos surged 10% to A$13.39 after the South China Morning Post reported that China National Petroleum Corp. was considering teaming up to bid for Australia’s third-biggest oil and gas producer.
In Tokyo, the Nikkei 225 Index jumped 4.7% to 8288.90 on optimism U.S. President-elect Barack Obama plans to boost spending on the biggest public works program since the 1950s. Komatsu, the world’s second-biggest manufacturer of earth-moving equipment, jumped 8.3%.
(Businesswire.co.nz)
ENDS

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