MARKET CLOSE: NZ shares fall; TEL, CEN decline

MARKET CLOSE: NZ shares fall; Telecom, Contact decline, Rakon gains

By Jason Krupp

July 27 (BusinessWire) – New Zealand stocks fell for the second time in six sessions, as declines in Telecom Corp. and Contact Energy Ltd. took the shine off more positive global sentiment for equities ahead of the corporate earnings season.

The NZX 50 fell 12.7 points, or 0.4%, to 3008.4 points. Within the index 15 shares fell, 18 rose and 17 were unchanged. Turnover was $61.2 million.

“We are in a holding pattern ahead of results season in New Zealand, and the lack of news out there means the market is at the mercy of liquidity flows,” said Craig Brown, who helps manage $1.1 billion in equities for ING New Zealand Ltd. “Today we’ve seen weakness in Telecom and Contact, which are two rather large cap stocks, so with the price shift there it doesn’t take too much to drag the market down.”

Telecom, New Zealand’s largest phone company, fell 2% to $1.93. Brown said the stock was coming under pressure with speculation in the Australian media that there has been a lack of strong bids for AAPT, the company’s Australian unit.

Contact fell 1.6% to $5.60 after the biggest utility on the bourse reported no growth in electricity customers last month, with the total steady at 477,000.

“Operations data showed a low wholesale price for June, who has impacted on their year 2010 numbers,” said Brown. “Interestingly, the numbers in the first weeks of July were at noticeably higher levels, so that might hint that they will be starting the year in a slightly more positive position.”

Goodman Fielder Ltd., the dual-listed food producer, fell 2.4% to $1.62, pacing decliners on the day. Fisher & Paykel Appliances Holdings Ltd., the whiteware manufacturer, fell 1.8% to 54 cents, and ING Property Trust, the retail and commercial property manager, fell 1.5% to 68 cents.

Rakon Ltd., the maker of crystal oscillators used in cell phones and GPS units, paced gainers on the NZX 50, with shares up 4% to $1.05. Earlier in the day the stock touched $1.07, its highest level in more than five months.

Westpac Banking Corp., the Australian lender, rose 2.8% to $29.10, Ebos Group, the medical and scientific equipment supplier, rose 2.4% to $6.30, and rural services company Pyne Gould Corp. rose 2.4% to 42 cents.

NZ Windfarms Ltd. rose 4.8% to 22 cents after reporting annual revenue from electricity sales more-than quadrupled to $4.1 million in the year ended June 30 - still fell well short of the $4.7 million forecast in the April prospectus for its $31.4 million rights issue.

Air New Zealand, the national carrier, rose 1.8% to $1.14 after it released monthly operating statistics which showed domestic passengers rose 10.2% in June from a year earlier to 664,000.

Domestic demand, measured by revenue passenger kilometers, gained 10.6 percent as capacity increased 2.9 percent.

The airline yesterday unveiled a loyalty card offering discounts of 15 percent or 30 percent depending on which plan is purchased, under a system that locks customers into a longer-term commitment to the airline.

Pike River Coal Ltd., the mining company, rose 2.1% to 97 cents, on news that Centennial Coal Ltd., the Australian producer that agreed to a A$2 billion takeover by Thailand’s Banpu Plc, reported a 13% jump in third-quarter sales.

The buyout of the company had earlier fueled speculation of a looming consolidation in the coal industry, which saw Pike River’s stock price rise as a result.

(BusinessDesk)

© Scoop Media