MARKET CLOSE: NZ shares fall on US debt impasse; NZX falls

MARKET CLOSE: NZ shares fall on US debt impasse; NZX, NZO drop

July 27 (BusinessDesk) – New Zealand shares fell, led by bourse operator NZX and NZ Oil & Gas, as the U.S. delayed a vote on raising its debt ceiling and accelerating inflation in Australia raised the prospect of interest rate hikes in the biggest market for kiwi goods.

The NZX 50 fell 4.26, or 0.1%, to 3412.35, the third daily decline. Within the index, 19 stocks fell, 16 rose and 15 were unchanged. Turnover was $94.7 million.

Shares were broadly lower across Asia after U.S. House Speaker John Boehner delayed a vote of lifting the US$14.3 trillion debt ceiling. Standard & Poor’s and Moody’s Investors Service have warned they will cut America’s top credit rating if Congress can’t agree to borrow more.

NZX fell 5.1% to $2.25. Of three analysts who follow the stock, NZX has a ‘buy’, an ‘outperform’ and an ‘underperform’ rating.

The company recently commissioned an independent assessment of its valuation of the Melbourne-based Clear grain exchange, which affirmed its valuation.

NZ Oil & Gas dropped 4.3% to 67 cents, the lowest close since August 2005. In the past three days, the company has shed a fifth of its market value as investors marked down the likely contribution from the 12.5% owned Tui oilfield, which has been assessed as having smaller probable reserves.

Pan Pacific Petroleum was unchanged at 16.5, having gained yesterday even though it has a 10% interest in Tui. Major shareholder and director Allan Tattersfield bought 120,903 shares, according to a notice to the NZX.

Fisher & Paykel Healthcare Corp. was among exporting manufacturers to decline in the face of a soaring kiwi dollar. The maker of breathing masks used to control sleep apnoea fell about 2% to $2.50. It gets more than half its revenue in U.S. dollars.

Carpet maker Cavalier Corp. fell 2.9% to $3.50 and tap maker Methven Ltd. declined 1.9% to $1.54.

Jasons Travel Media was unchanged at 25 cents after saying annual operating earnings will fall about 10% reflecting softening accommodation print revenues amid challenging trading conditions. The company said earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to fall to $1.72 million in the year ending March 2012.

Livestock Improvement Corp., the farmer-owned animal genetics and semen cooperative, rose 1.4% to $3.55 after posting a surge in annual profit after record sales of semen for dairy herds, allowing it to pay the highest-ever dividend. Profit jumped to $17.6 million in the 12 months ended May 31, from $9.1 million a year earlier, the company said in a statement today. Sales climbed 21% to $166 million.

Vital Healthcare Property Trust was unchanged at $1.17 after the independent directors of the manager, ANZ Bank’s OnePath NZ, turned down an $8 million proposal to relinquish the management contract. The NZ Shareholders Association yesterday said it would support a deal for the contract for $5.5 million.

(BusinessDesk)

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