MARKET CLOSE: NZ stocks fall on global growth fears

MARKET CLOSE: NZ stocks fall on global growth fears; Skellerup leads decliners, Wrightson gains

By Jason Krupp

July 11 (BusinessDesk) - New Zealand stocks fell to their lowest level this month, pacing declines in equity markets across Asia, after a weak U.S. jobs report stoked concern that the global economic recovery is stalling. Skellerup Holdings led decliners, while PGG Wrightson Ltd. rose.

The NZX 50 Index fell 22.01 points, or 0.6%, to 3,434.14. Within the index, 25 stocks fell, 12 stocks rose, and 13 were unchanged. Turnover was $166.2 million.

Australia's share market was among the worst performing bourses across the Asia pacific region, with the S&P/ASX 200 recently trading 1.6% lower at 4,580.

"We're just following on from the weak close in the States," said Greg Easton, a financial adviser at Craigs Investment Partners. "Australia follows the U.S. marker a lot closer than we do, but once they opened lower we just followed them into the red."

Skellerup, the rubber goods and milking products manufacturer, fell 4.1% to $1.18. The stock is rated as 'buy' according to the consensus forecast of three analysts compiled by Reuters.

Guinness Peat Group, the investment holding company which recently cancelled 227.9 million of its shares in exchange for payment of 35.07 pence apiece, fell 3.8% to 76 cents.

The stock was among the most active on the exchange today, trading in large chunks, suggesting a large scale portfolio rebalancing, Easton said.
Financial stocks came under heavily selling pressure today following their Australian listings lower.

Westpac Banking Corp., the Australian lender, fell 3.3% to $27.80 on the NZX.
AMP Ltd., the wealth manager that bought the Australian and New Zealand assets of Axa Asia Pacific Holdings this year, fell 3.1% to $6.25.

Australia & New Zealand Banking Group, the country's biggest lender, fell 2.6% to $27.70.

Methven Ltd., the tapware manufacturer, fell 2% to $1.50.

Pyne Gould Corp., the financial services company, fell 2.7% to 36 cents after it confirmed it has taken a $14 million stake in a National Australia Bank loan to a related fund, Equity Partners Infrastructure Company (EPIC).

The deal will help EPIC avoid default and will help the orderly sale of its assets, the investment company said in a statement.

The NAB facility was due for repayment on April 30, but the lender waived that condition on the proviso EPIC significantly reduced its debt by the end of June, according to the NZX Market Supervision decision allowing the related party deal.

Wrightson, the rural services company looking to sell it finance unit to Heartland New Zealand Ltd., rose 4.4% to 48 cents, leading gainers on the exchange. The stock is rated as 'outperform' according to a consensus poll of four analysts compiled by Reuters.

Air New Zealand Ltd., the national carrier, rose 1.7% to $1.17, amid reports that its Australian rivals could be forced to raise their fares as a result the country's carbon tax policy.

Qantas Airways today said it may face costs of about A$110 million to A$115 million in the 2013 financial year as a result of the policy.

Sky Network Entertainment Group, the pay TV operator, rose 1.4% to $5.88.

Cavalier Corp., the listed carpet maker, rose 0.5% to $3.80. Wool Equities today emerged as a rival bidder for NZ Wool Services International, saying it has funding in place to make an offer for the wool scouring company.

Cavalier Wool Holdings, made up of Cavalier, ACC's investment arm and private equity investor Direct Capital Investments was ordered to make a temporary halt to its offer for WSI on Friday pending an appeal by carpet maker Godfrey Hirst, which opposes that deal.

The Commerce Commission approved Cavalier's $40 million takeover even though it would create a monopoly in New Zealand wool scouring because it agreed the competitive threat was from Chinese rivals.

(BusinessDesk)

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