MARKET CLOSE: NZ shares fall on Nuplex profit warning

MARKET CLOSE: NZ shares fall on Nuplex profit warning, Sanford gets boat back

Dec. 16 (BusinessDesk) – New Zealand shares fell after Nuplex Industries said it wouldn’t meet earnings guidance, stoking concerns more companies will suffer as Europe’s debt woes help slow global growth. Sanford rose after the fishing company reached agreement to recover an impounded tuna vessel.

The NZX 50 Index fell 17.84, or 0.5 percent, to 3245.34. Within the index, 32 stocks fell, 11 gained and eight were unchanged. Turnover was a lower-than-average $77 million.

The New Zealand bourse was one of the few to record a decline today in the Asia Pacific region, with most equity markets buoyed by better economic indicators out of the US and a Spanish bond auction yesterday that drew strong demand. The kiwi dollar extended is gains today, rising above 76 US cents as investors risk appetite returned.

Still, Nuplex’s profit downgrade sounded an ominous warning. The shares dropped 9.1 percent to $2.21, the lowest close since August 2009 after the specialty chemicals maker said flagged 2012 earnings will be as much as 10 percent lower than its guidance in the face of slowing global demand.

The Nuplex announcement “shows the soft demand for its product in a slow economic environment –it is a sign of the times for a number of companies,” said Grant Williamson, a director at Hamilton Hindin Greene.

Cavalier, the carpet maker, dropped 7.1 percent to $2.09 and Steel & Tube Holdings, which sells products to the construction industry, fell 6.9 percent to $2.04.

Sanford gained 2.1 percent to $3.93. The fishing company indicted by the US coastguard over alleged polluting by the San Nikunau working out of American Samoa said today it had reached agreement for the release of the tuna fishing vessel.

Sanford faces seven charges including obstruction of justice relating the boat after an investigation by the US Coast Guard which it has vowed to fight “vigorously”. The agreement requires Sanford to post a bond of US$1 million to cover potential fines or penalties.

Trade Me, the online auction site sold down by Fairfax Media in an initial public offering this month, gained 0.7 percent to $2.88, above the IPO price of $2.70.

Chorus, the network business spun-off from Telecom, led gainers on the NZX 50 today, rising 3.1 percent to $3.04. Telecom fell 1.5 percent to $2.035.

Among other stocks, Fisher & Paykel Appliances, the whiteware manufacturer, fell 4.2 percent to 34 cents. Contact Energy, the biggest power company on the NZX 50, rose about 1 percent to $5.29.

Shares in fruit marketer Turners & Growers were unchanged at $1.78 in trading today, a discount of 3.8 percent to the offer price, after the target company statement showed BayWa AG’s $137.4 million takeover bid falls within the independent valuer’s range

The $1.85 per share offer, which was an 8.8 percent premium to the closing price before the announcement falls within independent adviser KordaMentha’s valuation range of $1.75 to $2.10 per share. That’s encouraged T&G’s independent committee to recommend shareholders accept the offer.

(BusinessDesk)

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