MARKET CLOSE: NZ stocks fall; Cavalier leads decliners

MARKET CLOSE: NZ stocks fall; Cavalier leads decliners, Mainfreight rises

By Jason Krupp

July 28 (BusinessDesk) - New Zealand stocks fell, following regional markets lower as investors again looked to limit their risk exposure with politicians in Washington still deadlocked on the U.S. debt ceiling negotiations. Cavalier Corp. fell and Mainfreight Ltd. rose.

The NZX 50 Index fell 15.56 points, or 0.5%, to 3,396.78. Within the index, 29 stocks fell, 10 stocks rose, and 11 were unchanged. Turnover was a lower than usual $92.1 million.

Regional markets were again trading in negative territory amid heightened anxiety about a possible U.S. default. In afternoon trade, Japan's Nikkei 225 Index fell 1.7% to 9,876.13, Hong Kong's Hang Seng Index fell 1% to 22,308.44, and Australia's S&P/ASX 200 Index fell 1.6% to 4,466.6.

"The impasse on the U.S. debt ceiling is entertaining television, but the thought of them not passing an extension in due course is unthinkable," said Shane Solly, portfolio manager and Mint Asset Management.

Cavalier, the listed carpet maker looking to establish a wool scouring monopoly in New Zealand, fell 2.9% to $3.40. The stock is rated as 'outperform' according to a consensus poll of four analysts compiled by Reuters.

"Cavalier is exposed to Australian and New Zealand residential activity, which is still moribund," Solly said. "They've done a lot to get their business in order but they’re still waiting for the market to pick up."

Methven Ltd., the tapware manufacturer, fell 2.6% to $1.50. The company last week said it expects to make a $9 million profit for the year ending March 2012, while net debt will drop 20%. That's up from a profit of $4.7 million in the 2011 financial year.

Steel & Tube Holdings, the construction supplies company, fell 2.4% to $2.47, with the delayed Christchurch rebuilding process weighing on the stock.

Pumpkin Patch Ltd., the children's clothing chain, fell 1.9% to $1.04. Kathmandu Holdings, the outdoor clothing and equipment retailer, fell 1.9% to $2.15.

Dual-listed banking counters also came under pressure today, with Australia & New Zealand Banking Group, the country's biggest lender, falling 1.9% to $26.60. Westpac Banking Corp., the Australian lender, fell 1.8% to $26.36.

Nuplex, the industrial chemicals and resins manufacturer, fell 1.8% to $2.75.

Guinness Peat Group, the investment holding company, fell 0.7% to 72.5 cents today after it announced that ASB chairman Gavin Walker will be stepping from the company's board due to a conflict of interests.

Walker's resignation comes just 10 months after he joined GPG's board, when he and three other independent directors appointed to reappraise the underperforming investment holding company's strategy.

Mainfreight Ltd., rose 2% to $10.35, leading gainers on the exchange after managing director Don Braid told shareholders sales will soar 42% next year, helped by the acquisition of Dutch transport operator Wim Bosman and stoking earnings at New Zealand's biggest trucking firm.

APN News & Media Ltd., which publishes the New Zealand Herald newspaper and operates the Radio Network, rose 1.4% to $1.47.

Telstra Corp., the Australian phone company, rose 1.3% to $3.85.

Goodman Property Trust, the listed property investment vehicle, rose 1% to 99 cents.

Tower, the general insurer controlled by GPG, rose 0.7% to $1.52.

Contact Energy Ltd., the country's biggest listed electricity company, rose 0.6% to $5.18.

Hallenstein Glasson Holdings, the fashion retailer, rose 0.3% to $3.46.

Telecom Corp., the country's biggest phone company, rose 0.2% to $2.65. The Commerce Commission today said it wants the company to offer slightly lower wholesale prices on its unbundled bitstream access after its final probe before the phone company is split.

The antitrust regulator increased the amount deducted from the UBA price to $10.87 a month, excluding GST, which reflects what Telecom’s own internet service providers pay.

The commission also determined retail data costs to be 30 cents a gigabyte lower at $1 a GB, after it adopted a new methodology.

(BusinessDesk)

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