MARKET CLOSE: NZ stocks fall; NZOG paces declines

MARKET CLOSE: NZ stocks fall; NZOG paces declines as Pike exits benchmark index

By Jason Krupp

Dec. 14 (BusinessDesk) - New Zealand stocks fell, with NZ Oil & Gas Ltd. pacing decliners on the exchange after Pike River Coal had its securities suspended and the stock replaced on the NZX 50 benchmark by Skellerup Holdings.

The NZX 50 Index fell 2.32 points, or 0.07%, to 3,288.95. Within the index, 22 stocks fell, 15 rose and 13 were unchanged. Turnover was $98.4 million.

NZ Oil & Gas, the energy exploration and production company with a 29% stake in Pike, fell 1.2% to 86 cents after it called in the receivers yesterday to help the miner stave off insolvency after a series of explosions at its West Coast mine killed 29 miners and brought production to a halt. The move prompted NZX Ltd., the market operator, to suspend Pike's securities and remove it from the benchmark index while it works out the best exit price.

"The market continues to remain indecisive as to where the core value resides in the stock, but that will be addressed in fullness of time," said Peter Sigley, an institutional broker at Goldman Sachs & Partners.

Skellerup, the rubber goods and milking equipment group, rose 4% to $1.03, its highest level since mid-2007 after the stock was chosen to replace Pike on the NZX 50.

"The stock has had stellar run and looks set to continue to do so," Sigley said.

Vital Healthcare Property Trust, the specialist investor in medical clinics, fell 2.8% to $1.06, leading decliners on the exchange. Pyne Gould Corp., the financial services company looking to transform itself into a bank, fell 2.6% to 37 cents, and Pumpkin Patch Ltd., the children's clothing retailer, fell 2.3% to $1.70.

Air New Zealand Ltd., the national carrier, fell 0.7% to $1.41 after the airline said it expects a decision on its proposed alliance with Virgin Blue to be announced by Australian competition authorities as early as tomorrow.

Air NZ and Virgin Blue want to merge their trans-Tasman operations to compete against the Qantas-Jetstar alliance, but have run afoul of regulators and business groups who claim the deal will stifle completion.

Restaurant Brands NZ Ltd., the fast food franchise operator, was unchanged at $2.61 after it reported a 1.8% increase in third quarter sales, again led by a strong performance at its KFC franchise.

Total sales rose to $74.2 million in the three months to Dec. 6, compared to $72.9 million in the same period last year, while same store sales also rose 1.8% to $71.7 million.

"We expect to see good sales growth in the fourth quarter, with the total result substantially better than last year," said chief executive Russel Creedy.

Kathmandu Holdings, the outdoor clothing retailer, rose 2.4% to $1.70, pacing gainers on the exchange. PPG Wrightson Ltd., the rural services group, rose 2.1% to 49 cents, Goodman Fielder Ltd., the food ingredient manufacturer, rose 1.7% to $1.82, and investment holding company Guinness Peat Group rose 1.4% to 71 cents.

Telecom Corp., New Zealand's biggest telephone company, rose 1% to $2.11, with the stock continuing to ride the positive sentiment after it was selected as one of three prioritised bidders to build government's ultrafast broadband project.

"On the one hand it is positive they're still in the game, and on the other there is uncertainty as to what undertakings they had to give to remain in the process," Sigley said.

Delegat's Group Ltd. was unchanged at $1.94 after its offer for Oyster Bay Marlborough Vineyards went unconditional after the winemaker acquired a 90% stake in the grape grower one day ahead of deadline.

Delegat's owned 54.9 per cent of Oyster Bay before launching a takeover offer, and has raised the price of its bid to $2.08 a share from $1.80.

(BusinessDesk)

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