MARKET CLOSE: NZ stocks fall ahead of Bernanke

MARKET CLOSE: NZ stocks fall ahead of Bernanke speech; APN, RAK, VCT lead decliners

By Jason Krupp

Oct. 15 (BusinessDesk) – New Zealand stocks fell for the first time in three sessions as investors kept to the sidelines ahead of a speech by U.S. Federal Reserve Chairman Ben Bernanke which may signal another round of quantitative easing. APN News & Media Ltd., Rakon Ltd., and Vector Ltd. paced decliners on the exchange.

The NZX 50 Index fell 6.7 points, or 0.2%, to 3,255.8. Within the index, 21 stocks fell, 19 rose and 10 were unchanged. Turnover was $87.7 million.

“With Bernanke talking in the States there has been a little nervousness out there in the market,” said Shane Solly, a portfolio manager at Mint Asset Management. “Investors have mostly kept to the sidelines waiting for this, which will set the tone for the week to come.”

APN News & Media, which publishes the New Zealand Herald and operates the Radio Network, fell 3.4% to $2.53. Rakon, the maker of crystal oscillators used in cellphones and GPS units, fell 3.2% to $1.23, and Vector, the gas and power lines company, fell 2.1% to $2.30.

Fletcher Building Ltd., the country’s biggest construction company, fell 0.4% to $8.35, after the company said it expects the residential property market to remain subdued until next year when rebuilding begins in Canterbury and the government's response to 'leaky homes' comes into effect.

Fletcher has won the contract to manage the Earthquake Commission's project management office for the rebuilding, though Ling said it probably won't have a significant impact on first-half trading.

Telecom Corp., New Zealand’s biggest telephone company, fell 0.5% to $2.07, after the Commerce Commission launched an investigation into whether its wholesale unit discriminated against its retail rivals, breaching the terms of its operational separation.

In July, Telecom agreed to pay $1.7 million to its rivals and the regulator after reaching a settlement of a wholesale loyalty offer that was bound for the High Court. Had the phone company lost, it faced fines of up to $10 million for each breach.

PGG Wrightson Ltd. fell 1.7% to 57 cents, after NZ Farming Systems Uruguay Ltd., the South American dairy operator, formally cut its ties with the rural services company yesterday. In August the company bought back its management contract from the rural services provider for $4 million. Shares in Farming Systems were unchanged at 59 cents.

Ecoya Ltd., the global candle and fragrance distributor, fell 2.6% to 76 cents after the company announced that it had raised additional funds to complete its previously announced buyout of Wellington-based natural skincare company Trilogy.

The $10 million payment, to be made of $5m cash and half in Ecoya shares issued at $1 each is contingent on 2011 calendar year target EBITDA being achieved before the full payment will be made.

Air New Zealand Ltd., the national carrier, rose 1.5% to $1.32, pacing gainers on the NZX 50. The airline is likely to face increased competition after Jetstar announced it has joined forces with American Airlines to share domestic New Zealand services. The new codeshare agreement applies to domestic services between Queenstown, Christchurch, Wellington and Auckland and represents 116 weekly flights.

AMP Ltd., the Australian wealth manager rose 1.5% % to $7. Guinness Peat Group, the investment holding company, rose 1.4% to 71 cents, and Sky Network Television, the pay TV operator, rose 1.2% to $5.21.

Cavalier Corp., the listed carpet maker, rose 0.3% to $3.06 after the company issued 278,756 new shares as part of a dividend reinvestment plan. The company also went ex-dividend today.

Goodman Property Trust rose 1% to 99 cents, after the listed property investor announced that it had completed the refinancing of $400 million of debt for its portfolio worth $1.47 billion.

The refinancing includes $75 million of GMT’s main debt facility with ANZ National Bank, and $281 million of other debt facilities together with a $45 million wholesale bond issue. Shares were unchanged at 98 cents yesterday.

(BusinessDesk)

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