MARKET CLOSE: NZ stocks fall ahead of Fed move

MARKET CLOSE: NZ stocks fall as risk appetite shrinks ahead of Fed announcement

By Jason Krupp

Nov. 1 (BusinessDesk) – New Zealand stocks fell for the first time in three sessions, as investors kept their bets to a minimum ahead of a string of major economic announcements this week. APN News & Media Ltd. paced decliners on the bourse, while SkyCity Entertainment Ltd. rose.

The NZX 50 Index fell 5.16 points, or 0.2%, to 3,299.72. Within the index, 28 stocks fell, 10 rose and 12 were unchanged. Turnover was $57 million on a day marked by light volumes.

Investor activity was subdued ahead of a rates announcement by the Reserve
Bank of Australia tomorrow, and the Federal Reserve’s long-awaited decision later in the week on how big their quantitative easing programme will be. The week is topped off by the release of U.S non-farm payroll data on Friday, a key barometer for the world’s biggest economy.

“You’ve got a scenario where we are experiencing one of the biggest weeks ever in terms of financial news, so people are understandably hesitant,” said Shane Solly, portfolio manager for Mint Asset Management. “They want to make sure it delivers something rather nothing before committing.”

APN, which publishes the New Zealand Herald and operates the Radio Network, fell 4.8% to $2.40, leading declines on the NZX 50. Goodman Fielder, the food ingredient manufacturer, fell 3.6% to $1.87, and PGG Wrightson, the rural services company, fell 1.9% to 53 cents.

DNZ Property Fund Ltd., the diversified property investor which recently joined the NZX 50 Index, fell 0.9% to $1.17 after it sold another two of its properties for $20.7 million.

This is the second time in just over two months that the company has sold properties to pay off bank loans, having disposed of two vacant industrial sites near the Auckland International Airport for $2.9 million in August.

SkyCity, the casino and hotel operator, rose 2.3% to $3.09, pacing gainers on the main board. Solly said the stock was still benefitting from the upbeat outlook the company delivered to shareholders at its AGM last week.

The company said that it was targeting a profit of at least $127.4 million in the 2011 financial year as earnings got off to a solid start in the first quarter, after normalised net profit rose 3.7% in the three months ended Sept. 30 from a year earlier.

Ebos Group, which supplies medical and scientific equipment to the medical sector, rose 2% to $7.50, Fisher & Paykel Appliances Holdings, the whiteware manufacturer, rose 1.7% to 61 cents, and Restaurant Brands NZ Ltd., the fastfood franchise operator, rose 1.1% to $2.80.

Contact Energy Ltd., the utility company, rose 1% to $5.91 after the company won draft approval for its 250 Megawatt Tauhara geothermal power station project under the new Environmental Protection Authority.

The new plant will be the largest constructed for many years, and is likely to be built before the 220MW Te Mihi power station, in the Wairakei geothermal steamfield, for which Contact also holds resource consents.

Guinness Peat Group, the investment holding company, was unchanged at 72 cents after Mitr Phol Sugar Corp., Thailand’s biggest sugar company, agreed to acquire the majority of GPG’s holdings in ASX-listed Maryborough Sugar Factor Ltd.

Mitr Phol would pay A$4 a share in cash for most of GPG’s holding, valuing a 19.9% stake at A$52 million. The deal is subject to review by Australia’s Foreign Investment Review Board.

Property for Industry Ltd., the investor in commercial real estate, was unchanged at $1.16 it reported after-tax earnings for the quarter of $13.7 million, up approximately 5% on the same period a year earlier, before counting the benefit of tax credits booked in the latest period.

Pacific Brands was unchanged at $1.40 after Australia’s biggest clothing maker said it had agreed to sell it Dunlop Foams and Sleepmaker businesses to Sleepyhead for a gross $55 million, and to acquire Sleepyhead’s Australian carpet underlay business, Wonderlay, for a nominal amount.

Kiwi Income Property Trust, the property investor, was unchanged at $1.05 after it signed a new nine-year lease with Beca Corporate Holdings for 14,000 square meters of office space at its Pitt Street property in Auckland.

(BusinessDesk)

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