MARKET CLOSE: NZ stocks fall; NZ Oil & Gas leads decliners

MARKET CLOSE: NZ stocks fall; NZ Oil & Gas leads decliners, Argosy rises

By Jason Krupp

July 25 (BusinessDesk) - New Zealand stocks fell for the first time in five sessions, with New Zealand Oil & Gas Ltd. leading decliners after reserves at its offshore Taranaki oil and gas field were downgraded by between 18% and 22%. Argosy Property Trust rose.

The NZX 50 Index fell 21.06 points, or 0.6%, to 3,428.15. Within the index, 27 stocks fell, 13 rose, and 10 were unchanged. Turnover was $64.9 million.

NZ Oil & Gas, the energy exploration and production company, fell 13.1% to a seven year low of 73 cents, after the Australian operator of the Tui field said probable reserves are between nine and 11 million barrels of oil smaller than the 50.5 million barrels previously thought to be recoverable.

If correct, that means Tui will probably stop operating some time in 2019 or 2020. Tui is 12.5% held by New Zealand Oil & Gas. Shares in Pan Pacific Petroleum NL, the Australian oil company that owns a 10% stake in the Tui field, fell 8.6% to 16 cents.

"Tui has been a great cash cow but the big question was always been where were they were going to get the growth from, how were they how to replace Tui?" said James Smalley, an adviser at Hamilton Hindin Greene. "This downgrade of the reserves really puts that issue in the spotlight."

Dual listed stocks came under pressure today, with Australian financial stocks bearing the brunt of the sharp pullback in risk appetites in the wake of the deadlocked U.S. debt ceiling negotiations. In afternoon trade the S&P/ASX 200 fell 1.5% to 4,532.20.

AMP Ltd., the wealth management company, fell 4.1% to $5.85 on the NZX, and recently traded 1.9% lower on the ASX at A$4.71.

Australia & New Zealand Banking Group, the country's biggest lender, fell 3.6% to $26.60, and dropped 2% to A$21.30 on the Australian bourse.

Westpac Banking Corp., the Australian lender, fell 2.6% to $26.65 on the NZX, and dropped 1.7% to A$21.23 on the ASX.

Pumpkin Patch, the children's clothing chain, fell 2.8% to $1.04.

Fisher & Paykel Healthcare Corp., the maker of respirators and breathing masks, fell 2.8% to $2.47, with the strength of the New Zealand dollar weighing on the exporter. The company earns about 54% of its revenue in U.S. dollars.

PGG Wrightson Ltd., the rural services company, fell 2% to 48 cents.

Charlie's Group was unchanged at 43 cents after the Overseas Investment Office cleared Japanese brewer Asahi to buy out the juice and soft drink maker.

The brewer has offered 44 cents per Charlie's share, valuing the company at $129.3 million, with the deal conditional on gaining 90% of the shares.

Argosy, the listed property investment vehicle looking to internalise its management contract, rose 2.4% to 84 cents, leading gainers on the exchange.

SkyCity Entertainment Group rose 1.9% to $3.72, with interest in the casino and hotel operator picking up ahead of the Rugby World Cup.

Restaurant Brands NZ Ltd., the fast food franchise operator, rose 0.8% to $2.44.

Property for Industry Ltd., the industrial and commercial property investor, rose 0.8% to $1.24.

Tower Ltd., the general insurance company controlled by Guinness Peat Group, rose 0.7% to $1.54.

Freightways Ltd., the express package company, rose 0.6% to $3.42.

(BusinessDesk)

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