MARKET CLOSE: NZ stocks fall; NZX leads decliners

MARKET CLOSE: NZ stocks fall; NZX leads decliners, Wrightson gains

By Jason Krupp

July 8 (BusinessDesk) - New Zealand stocks fell for a third session, with the exchange among the worst performing bourse in the Asia Pacific region. NZX Ltd. led decliners amid the growing war of words over its Clear grain exchange, while PGG Wrightson Ltd. rose.

The NZX 50 Index fell 4.41 points, or 0.1%, to 3,456.13, and declined 0.5% on the week. Within the index, 16 stocks fell, 16 rose, and 14 were unchanged. Turnover was $129.7 million

Asian Pacific markets were mostly trading in positive territory, amid strong appetite for higher yielding or riskier assets, with Japan's Nikkei 225 index up 0.8% at 10,154.6, Hong Kong's Hang Seng Index 1.1% higher at 22,771.5, and Australia's S&P/ASX Index up 1% at 4,652.3.

"The exchange hasn't really followed the offshore markets," said Grant Williamson, a director at Hamilton Hindin Greene. "Investors do seem to have one eye on the currency, and seeing as the New Zealand dollar rose to a fresh high against the US dollar, that's probably a reason to be concerned. It does affect quite a few companies, both exports and companies with operations offshore."

The New Zealand dollar recently traded at 83.14 U.S. cents, having hit a fresh post float high of 83.39 cents earlier today.

NZX, the securities market operator, fell 4% to $2.40. The company today lashed out at the lawyer of Clear's former owner, Grant Thomas, accusing him of "unpleasant" tactics after details the lawsuit were leaked. Thomas co-founded the Melbourne-based grain exchange before selling it to NZX and becoming an employee, and may seek as much as $17 million in earn-outs from the soured contract.

The stock exchange operator has asked auditor KPMG for a speedy valuation of the grain exchange, whose software was valued at $7.8 million as at Dec. 31.

Fisher & Paykel Healthcare Corp., the manufacturer of breathing masks and respirators, fell 1.9% to $2.66, with the strength of the New Zealand dollar weighing on the stock. About 54% of FPH's earnings are denominated in U.S. dollars.

Telecom Corp., the country's biggest phone company, fell 1.2% to $2.49.

Cavalier Corp., the listed carpet maker, fell 0.5% to $3.78, after the High Court in Wellington put its $40 billion bid to buy New Zealand Wool Services International Ltd. on hold, pending the outcome of Godfrey Hirst's court case.

The Australian carpet maker is challenging the Commerce Commission's decision to allow Cavalier to acquire WSI and establish a wool scouring monopoly in New Zealand.

Rubicon Ltd., the forestry-based biotech company, was unchanged at 60 cents after it announced that it had extended the terms and size of its bank debt facility to finance its ArborGen Inc. subsidiary, which was recently forced to scrap plans to list in the U.S.

The Auckland-based company's original debt facility with ANZ National Bank Ltd., which was set to expire in Dec. 31 this year, has been extended to July 1, 2013 and increased to US$20 million dollars, according to a statement to the stock exchange today.

Wrightson, the rural service provider, rose 2.2% to 46 cents, leading gainers on the exchange after managing director George Gould said yesterday the company is switching focus to staff and client relationships rather than "breaking the business up".

PGW is currently in the process of trying to sell its finance unit to Heartland New Zealand.

Westpac Banking Corp., the Australian lender, rose 1.2% to $28.75.

Warehouse Group, the country's biggest listed retailer, rose 1.2% to $3.60.

Air New Zealand Ltd., the national carrier, rose 0.9% to $1.15, after the U.S. Department of Justice dropped the airline from its investigation into cartel behavior in the air cargo market.

Air NZ, which has spent the last five years defending itself against the U.S. charges, has also escaped censure from the European Commission and South Korean regulators, which omitted the airline from a list of rivals fined for a role in a cartel. It is still under investigation in New Zealand.

Contact Energy Ltd., the country's biggest listed electricity company, rose 0.2% to $5.33, with the stock bouncing from a six year low as bargain hunters set in, Williamson said.

(BusinessDesk)

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