Market Open: NZX 50 edges lower, Westpac falls

Published: Wed 10 Dec 2008 11:41 AM
Market Open: NZX 50 edges lower, Westpac falls on share sale
Dec. 10 – New Zealand stocks were little changed, with the NZX 50 Index edging lower after Westpac Banking Corp. resumed trading after selling shares at a discount.
The NZX 50 fell 8.255, or 0.3%, to 2716.02 as at 11 a.m. in Wellington. Within the index, 11 stocks fell, seven rose and 32 were unchanged. Westpac fell 5.1% to NZ$20.50 on the NZX after completing its A$2.5 billion placement of shares to bolster its capital. The lender sold shares at A$16 apiece, 11% below their closing price on the previous day. ANZ Banking Group declined 2.7% to NZ$17.20.
New Zealand Oil & Gas sank 1.6% to NZ$1.25 after the U.S. Energy Department predicted global demand for crude oil will shrink 0.5% next year, the first contraction since the early 1980s. Crude oil for January delivery fell 1.7% to US$42.96 a barrel on the New York Mercantile Exchange. Pike River Coal dropped 1% to 95 cents.
The decline in the NZX 50 follows weaker markets in the U.S., where the Dow Jones Industrial Average dropped 2.7% after companies including FedEx Corp. forecast earnings that lagged behind analysts’ estimates.
In New Zealand, Warehouse Group Ltd., the biggest retailer on the NZX 50, fell 0.6% to NZ$3.26 after announcing it would withdraw from liquor retailing after being turned down for a licence for its Albany store. Chief executive Ian Morrice said the decision was also a consequence of the decision to exit its Xtra grocery format and higher costs to monitor liquor sales.
Cavalier gained 1.1% to NZ$1.82, gaining from its lowest level in at least a decade. Of four analysts who follow the stock, one rates it a ‘buy,’ two recommend it as a ‘hold’ and one has it as an ‘underperform.’
Freightways fell about 2% to NZ$2.95.

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