MARKET CLOSE: NZ shares down, Asia shrugs off Euro news

MARKET CLOSE: NZ shares down, Asia shrugs off Euro news

By Paul McBeth

Jan. 16 (BusinessDesk) – New Zealand shares fell near a four-week low after a mass downgrade of European nations’ credit ratings sapped investors’ appetite for bigger returns. Rubber goods manufacturer Skellerup led the decline.

The NZX 50 Index fell 16.82 points, or 0.5 percent, to 3210.63, the lowest level since Dec. 22. Within the index, 21 stocks fell, 13 rose, and 16 were unchanged. Turnover was well-below normal at $36.1 million.

Losses in Asian stock markets were relatively muted as investors sat on their hands in response to rating agency Standard & Poor’s downgrade of nine European nations on the weekend. The rating agency said it was disappointed with the outcome of policymakers’ agreement to prevent the region facing a sovereign debt crisis.

In afternoon trading, Australia’s S&P/ASX 200 index fell 1.1 percent to 4148.3, while Japan’s Nikkei 225 index was down 1.6 percent to 8367.36, and Hong Kong’s Hang Seng declined 1 percent to 19021.85.

“Investors are very cautious at the moment with many of them sitting on the sidelines to see if there are any further developments in Europe,” said Grant Williamson, director at Hamilton Hindin Greene. “These credit downgrades have mostly been built in by the markets, and it wasn’t a major surprise.”

Skellerup led New Zealand’s benchmark index lower, falling 3.7 percent to $1.30, followed by Infratil, down 3.2 percent to $1.82.

Dual-listed Australian financial services firms paced declines on the trans-Tasman exchanges, with Westpac falling 2 percent to $26.50 on the NZX, Australia & New Zealand Banking down 1.8 percent to $27 and AMP dropping 1.6 percent to $5.45.

Local lender Heartland New Zealand, which wants a banking licence, led gainers on the bourse, up 2.1 percent to 48 cents. Heartland no longer has to deal with extra costs associated with the government’s extended retail deposit guarantee, which closed at the end of last year.

Shares in carpet maker Cavalier rose 2 percent to $2.55, after the manufacturer announced chief operating office Colin McKenzie has been tapped to replace outgoing chief executive Wayne Chung in March. Chung has led the carpet maker for eight years, and will keep a non-executive seat on the board once the handover’s complete.

Shares in NZX fell 0.4 percent to $2.54 after the stock exchange operator settled the sale of its TZ1 carbon registry unit at US$21.4 million. That confirmed a final gain of NZ$33.7 million for the bourse operator, some $19.9 million below what was initially flagged in 2009.

Williamson said NZX investors can now look forward to the proposed announcement of a capital return later this year.

New Zealand Oil & Gas gained 0.7 percent to 73 cents, with weekend media reports talking up prospects for unconventional onshore finds being explored by Toronto-listed TAG Oil and Apache Corporation.

Units in Vital Healthcare Property Trust fell 2.6 percent to $1.12 after ANZ-owned fund manager OnePath NZ completed the sale of the property investor’s management company to Canadian-based NorthWest Value Partners. The deal also included the sale of $31.3 million of units to NorthWest from AUT Investments, a fellow ANZ subsidiary.

Shares in Fletcher Building, the biggest company on the exchange, fell 0.8 percent to $5.88, while fellow heavyweight Contact Energy declined 1.4 percent to $5.02. Telecom was unchanged at $1.98.

(BusinessDesk)

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