MARKET CLOSE: ASX drags NZX down

MARKET CLOSE: ASX drags NZX down

by Jason Krupp

Aug 11 (BusinessDesk) – New Zealand stocks fell for their second session in a row, following the Australian market lower as financial stocks dragged the market into negative territory. Dual-listed finance companies AMP Ltd. and Westpac Banking Corp. led decliners on the day.

The NZX 50 fell 9.1 points, or 0.3%, to 3036. Within the index 22 stocks fell, 17 rose and 11 were unchanged.

Turnover was $41.8 million. The ASX 200 was last trading down 1.7% at 4463.1 points, with lenders Westpac and Commonwealth bank of Australia warning of low demand for lending.

“Australia’s performance has been slightly disappointing of late, and given that their economy is a bit stronger than ours, its perhaps not surprising that investors are downbeat on the local market,” said Paul Robertshawe, who helps manage $220 million for Tower Asset Management Ltd.

“Lead indicators started rolling over about a month ago and haven’t bottomed out yet, and where indicators go markets tend to follow.”

Shares in AMP, the wealth manager, fell 2.8% to $6.70, Westpac fell 2.4% to $28.50, and financial services company, Pyne Gould Corp., fell 2.4% to 41 cents. Steel & Tube Holdings, which supplies steel building products such as reinforcing rods, fell 2.2% to $2.22, one day ahead of the release of their full-year financial results.

Robertshawe said the outlook for the company did not look good, and that the market was expecting weaker results.

Telecom Corp., New Zealand’s biggest telephone company, fell 1.5% to $2.04, Telstra Corp., fell 1.9% to $4.13 and Sky Network Television Ltd., the pay TV operator, fell 1.4% to $5.03.

DNZ Property Fund Ltd. will list at 97 cents on the NZX next Monday, beating its closing price on the Unlisted exchange.

The property investor that brought its management contract in-house raised $45 million through a pro-rata share issue and bookbuild, with new investors making up more than 80% of the new funds.

The company had predicted a range of between 80 cents and $1.05 for its NZX listing, and last traded at 90 cents on Unlisted.

Whiteware manufacturer Fisher & Paykel Appliances paced gainers on the day, up 2% to 51 cents.

NZ Farming Systems Uruguay Ltd., the South American dairy operator facing a takeover bid from Singapore’s Olam International, rose 1.8% to 56 cents.

The company’s directors recently urged shareholders not to sell their shares to Olam at the offer price of 55 cents – a significant discount of net asset value.

“There is some speculation that Olam is willing to pay a higher price for Farming Systems, given its net asset value,” said Robertshare. “But you have to ask how sustainable is that net asset value given that it’s based on land in Uruguay, and there are a lot of uncertainties about its value. Look at how property prices have changed here in a very short amount of time.”

Abano Healthcare Group Ltd., the investor in healthcare and medical services businesses, surged 2.6% to $5.36 a share, despite going ex its 13.7 cents final dividend. Shares in

Infratil Ltd, the specialist infrastructure investor, rose 0.6% to $1.63, after it said it is growing increasingly confident about its guidance for full year operating earnings of between $390 million and $430 million.

The forecast of earnings before interest, tax, amortisation and depreciation was issued in May, and would be updated as the year progressed, with the specialist infrastructure investor confident its active portfolio management style would suit it in the period ahead.

(BusinessDesk) 18:00:54

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