MARKET CLOSE: NZ stocks fall; Skellerup leads decline

MARKET CLOSE: NZ stocks fall; Skellerup leads decline, Wrightson rises

By Jason Krupp

July 18 (BusinessDesk) - New Zealand stock fell, pushing the NZX 50 Index to a three-month low, as uncertainty over the protracted debt ceiling negotiations in the U.S. and Europe's ongoing sovereign debt crisis sap demand for growth assets. Skellerup Holdings led decliners and PGG Wrightson Ltd. rose.

The NZX 50 Index fell 20.49 points, or 0.6%, to 3,385.88, its tenth consecutive decline. Within the index, 31 stocks fell, seven rose, and 12 were unchanged. Turnover was a lower-than-usual $81.6 million.

"With this period of uncertainty, investors seem to be holding back and waiting to get some direction from global markets," said Craig Brown, a senior investment analyst at OnePath New Zealand Ltd., who helps manages $1.1 billion of local equities. "We’re also in the funny period post-June 30 where companies go into lockdown mode ahead of reporting season, and the lack of local news is not helping."

Skellerup, the rubber goods and milking equipment manufacturer, fell 4.1% to $1.18. The stock is rated as a 'buy' according to a consensus poll of three analysts compiled by Reuters, with a media target price of $1.50.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, fell 3.9% to $1.22.

NZX Ltd., the securities market operator, fell 3.5% to $2.22. The company today published a snap audit of its Clear grain exchange by KPMG, which revealed the unit faced no impairment issues despite a slump in grain trading and a reduced profit outlook in the current financial year.

The audit was conducted after the Financial Markets Authority said it is taking an interest in the security market operator's disclosures over the performance of the grain exchange on the back of apparently contradictory statements from the company on the platform's performance.

The carrying value of the grain exchange remains unchanged and its expected reduction in profitability this year is "not material," the NZX board said in a statement.

"There is the view that because they are the market operator, they need to be squeaky clean," Brown said. "Certainly, they don’t have the same degree of flexibility we would give other companies."

Restaurant Brands NZ Ltd., the fast food franchise operator, fell 3.3% to $2.32.

Wrightson, the rural services company looking to sell its loan book to
Heartland New Zealand Ltd. for $100 million, rose 4.2% to a three week high of 50 cents, leading gainers on the exchange.

New Zealand Refining Co., which operates the country's only oil refinery, rose 2.3% to $3.60.

Warehouse Group, the nation's biggest listed retailer, rose 0.9% to $3.49.

Telecom Corp., the country's biggest phone company, rose 0.21% to $2.49, after a Deutsche Bank research report claimed the stock could top out at around $3 in the next 12-month on the back of the government's $1.35 billion ultrafast broadband project.

Cavotec MSL Holdings, the global engineering group and owner of Christchurch-based MoorMaster, was unchanged at $2.66 after the company reported a 34% rise in second quarter revenues to 46 million euros, compared to the same period last year.

Order intake rose 73% to 59.7 million euros, which the company said reflected the continued strong activity in major markets.

(BusinessDesk)

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