MARKET CLOSE: NZ shares join global rout on Greek bravado

MARKET CLOSE: NZ shares join global rout on Greek bravado; Fletcher falls, Telecom gains

Nov. 2 (BusinessDesk) - New Zealand shares fell, joining a global rout in equities sparked by Greek Prime Minister George Papandreou's surprise announcement on a referendum on austerity measures, which could derail Europe's efforts to contain its debt crisis. Fletcher Building paced the decline.

The NZX 50 fell 23.87, or 0.7 percent, to 3308.89. Within the index, 26 shares fell, 10 rose, and 14 were unchanged. Turnover was $120 million, with Fletcher and Telecom alone accounting for half the value.

Equity markets from Germany's DAX to the Standard & Poor's 500 Index to Japan's Nikkei 225 Index sank in the wake of Papandreou's announcement, which came ahead of a Group of 20 leaders' summit in France this week.

"The concern is what the flow-on effects would be," said Alan Moore, an executive director at Milford Asset Management. "The big worry now is Italy."

Fletcher fell 2.9 percent to $6.45, edging back to the 2 1/2-year low it reached last month when the company said earnings growth would stall this year amid weak building demand in Australia and New Zealand.

"The rumour is that there might be another negative announcement - people are being very cautious, there's no rush to buy," Moore said. "The good news from Fletcher could be nine months or a year away."

The stock market operator, NZX, fell 4.3 percent to $2.25, the lowest close since Aug. 29.

Fisher & Paykel Appliances declined 5.6 percent to 42 cents and Goodman Fielder's NZX-listed shares fell 4.3 percent to 66 cents.

Westpac fell 1.6 percent to $28.10 even after the Australian lender posted a 10 percent gain in annual profit on lower impairment charges as the local shares paced ASX-listed lenders lower.

Metlifecare was unchanged at $2.26 after the retirement home operator said it would raise $45.5 million in new equity capital, while 82 percent-owner Retirement Village Group will sell down its stake.

Pyne Gould, which holds the asset left over from the merger of Marac Finance with two building societies to form Heartland New Zealand, dropped 3 percent to 32 cents. Cornerstone shareholders George Kerr and Baker Street Capital have signalled they want to press on with a $47.2 million takeover bid at 33 cents a share.

Investment company Hellaby Holdings was unchanged at $2.79 after telling shareholders at their annual meeting that it is looking for “bolt-on” businesses, likely in Australia. Sales in Australia may rise to about a third of total sales by 2015 from less than 5 percent currently, managing director John Williamson said.

Among the biggest companies on the NZX, Contact Energy was unchanged at $5.68.

Telecom, whose shareholders have approved plans to split into wholesale and retail businesses, rose 1.6 percent to $2.61.

Milford's Moore said new Telecom could be a takeover target.

(BusinessDesk)

© Scoop Media