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NZ stocks dip at close as auto deal falters

Published: Sat 13 Dec 2008 10:52 AM
MARKET CLOSE: NZ stocks dip at close as auto deal falters
By Jonathan Underhill
Dec. 12 – New Zealand shares ended the session lower as news broke that the U.S. Congress had failed to reach a compromise on the US$14 billion rescue package for the U.S. automakers. Stocks tumbled across Asia.
The NZX 50 Index fell 49.759, or 1.8%, to 2676.952, the biggest decline since Nov. 21. Within the index, 34 stocks fell, eight gained and eight were unchanged. APN News & Media, which trades infrequently on the NZX, tumbled 16% to NZ$2.65 and NZ Farming Systems Uruguay fell 6% to 78 cents. Pike River Coal slipped 5% to 90 cents.
The automaker rescue impasse sent Japan’s Nikkei 225 Index down 6.6% to 8148.93, with Honda and Nissan both down more than 12% in early afternoon trading. Hong Kong’s Hang Seng fell 7% to 14515.42. In Sydney, the S/ASX 200 Index fell 3.2% to 3483.7.
“This puts the prospects of a rebound further out,” said Paul Richardson, who manages about NZ$150 million at BT Funds Management. “It may mean more write-downs and a longer-term impact on the U.S. economy.”
On the New Zealand bourse today, trading was a low-wattage NZ$55 million.
Hellaby Holdings fell 15% to NZ$1.23 after the diversified investment company said pretax earnings may fall as much as 26% this year on weakening demand for auto-parts, construction equipment and shrinking margins on shoes.
Warehouse Group declined 1.8% to NZ$3.25 after government figures showed retail sales fell 1.3% in October from the previous month, seasonally adjusted. Excluding auto-related products, core sales grew 0.8% percent, in line with expectations.
“The trend is still pretty weak,” said Robin Clements, chief economist at UBS New Zealand. Heading into the peak Christmas season, “retailers are braced to see how bad it is.”
Briscoe Group, whose retail stores include the Rebel sports chain, fell 1.4% to 70 cents.
Telecom Corp., the largest phone company on the NZX 50, fell 3.3% to NZ$2.32 after a Commerce Commission report showed rising popularity for rivals’ services using the carrier’s copper local loop.
Postie Plus Group rose 3% to 34 cents after the retailer said it is on track to lift first-half profit and expects an improved second-half result. “It will be a slow boil and still expect it will be well into the final quarter before we recover the losses and cross the line to deliver a modest profit,” chief executive Ron Boskell said.
(Businesswire)

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