MARKET COSE: NZ stocks fall; PGC, TEL, SKT drop

MARKET COSE: NZ stocks fall; Pyne Gould slides on SCF funding announcement

By Jason Krupp

June 28 (BusinessWire) – New Zealand stocks fell, rounding out the NZX 50 Index’s third successive daily decline, after a survey showed business confidence has waned, stoking concerns that companies may struggle to increase earnings this year. Pyne Gould Corp., Telecom Corp. and Sky Network Television Ltd. paced the slide.

The NZX 50 fell 25.7 points, or 0.8%, to 3,008.4. Within the index, 23 stocks fell, 16 rose and 11 were unchanged. Turnover was $78.2 million.

“The market is down on ongoing offshore concerns, and as we go into reporting season we are starting to see some downgrades,” said Paul Robertshawe, who manages $220 million for Tower Asset Management Ltd. “The market is having a look at its 2010 estimates to see who is likely to hit their targets and there are some concerns that a number of companies might miss them.”

Pyne Gould fell 5% to 38 cents after the financial services company announced that it had provided $15 million of a $100 million finance package to embattled financier South Canterbury Finance Ltd. through its asset management unit.

Telecom fell 3.6% to $1.90 after the telecommunication company’s chairman Wayne Boyd said that he will remain with the company until it has completed its restructuring to participate in the government’s broadband rollout.

Telecom is considering structural separation in order to participate in the Government’s UFB initiative, which threatens to undermine the dominance of the company’s national copper wire network.

Allied Farmers Ltd., the financier that took on the Hanover and United loan books in a debt-for-equity swap, fell 4.7% to 4 cents on news that it is still negotiating its banking facilities for the next financial year. The firm said it has yet to reach an agreement with its principal banker, Westpac Banking Corp., and another lender. Allied has drawn down $16.5 million on its Westpac credit line, and has an overdraft of $2.5 million that expires on July 1.

Smiths City Ltd., the Christchurch furniture and electronics retailer, fell 3.1% to 31 cents after the company announced that sales had fallen 5.3% to $226.1 million. The company still reported of $1.64 million in the year to April 30, on the back of aggressive cost-cutting measures and lower interest payments.

Guinness Peat Group was the biggest gainer, rising 3% to 68 cents after New Zealand-based director Tony Gibbs proposed an alternative plan to investors instead of demerging the firm’s Australian assets. Gibbs initially signed off on the plan but changed his mind when it became clear it may not win approval from shareholders.

Stock in dual-listed oil and gas company Cue Energy Resources Ltd. were unchanged at 32 cents after the company announced that it had sold its 10.72% interest in the Papua New Guinean PRL8 licence area, which includes the Kimu gas field.

Freightways Ltd., the courier and logistics firm, fell 1.1% to $2.82 after it said tax changes announced in the Budget will lift its deferred tax liability and reduced net profit by about $6 million in the year ending June 30.

(BusinessWire

© Scoop Media