NZX CLOSE: NZ shares fall as IPOs loom, Australian weakens; IFT drops

Tuesday 17th November 2009

New Zealand shares fell, tracking a slide in Australian equities, after banks sold off and as investors await a wave of new share sales and the outcome of Infratil Ltd’s talks to buy Shell New Zealand’s assets.

The NZX 50 Index fell 42.45, or 1.3%, to 3131.51. Within the index, 31 stocks fell, six rose and 13 were unchanged. Turnover was $84.8 million.

Among companies preparing to tap the market for funds in initial public offerings are milk processor Synlait, sweetener company BioVittoria and DNZ property Fund. They follow outdoor equipment chain Kathmandu Holdings, which began trading on Friday after its $422 million IPO. Kathmandu fell 0.9% to $2.21 today.

“Investors are putting a little bit of cash on the sidelines” in anticipation of the share sales, said Grant Williamson, a director at brokerage Hamilton Hindin Greene in Christchurch.

He said equities are looking fairly fully priced. “Bargain basement prices are gone. Until we see further evidence of improvement in economic growth, investors will be reluctant to buy more.”

Infratil fell about 2% to $1.51 after the airport, bus and power company investor posted a first-half loss on a charge against the value of its U.K. airports and to revalue financial derivatives. The investment group has lifted its holdings of cash by selling non-core assets as it negotiates with Shell.

“The uncertainty in the share price is over the possible purchase of Shell assets,” Williamson said. The company has also been marked down after exiting some airport assets with little in the way of profit.

Westpac Banking Corp. fell 2.9% to $30.80 on the NZX and Australia & New Zealand Banking Group declined 2.5% to $27.30, tracking declines in lenders on the ASX.

Cynotech Holdings climbed 3.5% to 15 cents, adding to its 32% surge yesterday, when chairman Allan Hawkins said he plans to make a takeover offer for the diversified company.

Fisher & Paykel Healthcare, the medical equipment maker that gets almost 80% of its revenue in U.S. dollars, fell 2.9% to $3.02 as the kiwi dollar climbed against an ailing greenback. The New Zealand dollar was recently at 74.81 U.S. cents.

Sanford Ltd, the fishing company that exports most of its catch, declined 3.4% to $4.80.Contact Energy declined 2.6% to $5.94 and Rakon Ltd. fell 2.5% to $1.15.Sky City Entertainment Group dropped 3.2% to $3.34.

PGG Wrightson jumped 7.7% to 70 cents, the biggest gain on the NZX 50 today. The Press newspaper reported that the rural services company is likely to overhaul its board of directors once it has completed its long-awaited capital raising. Details of the plans could be announced this week, the report said.

AMP Ltd fell 2.2% to $7.87 after the Australian wealth manager hosed down speculation it would raise its takeover offer for AXA Asia Pacific.

Businesswire.co.nz

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