MARKET CLOSE: NZX 50 sinks; Telstra, GFF fall

Thursday 12th March 2009

New Zealand's NZX 50 Index fell 0.2%. Goodman Fielder and Telstra led the decline. Air New Zealand rose almost 5%.

The NZX 50 Index fell 5.883 to 2491.624, its fourth decline in five sessions. Within the index, 19 shares fell, 18 rose and 13 were unchanged. Turnover was NZ$75.7 million. Australia's S&P/ASX 200 Index fell 0.1% to 3239.8.

Telstra fell about 6% to NZ$3.95 on the NZX and Goodman Fielder declined 6% to NZ$1.25.

Warehouse Group fell after the biggest retailer on the NZX 50 Index posted a 24% drop in first-half profit on costs to exit fresh food. Sales fell 2.9% though the company's gross margin widened.

"Clearly they are operating in a challenging environment" said Ricky Ward, a fund manager at Tyndall Investment Management, said about Warehouse. Still, "margins were better than people had expected."

Warehouse today said its operating margin widened to 9.1% in the first half from 8.8%. It held its dividend payment at 15.5 cents a share.

Shares were mixed as the central bank cut its benchmark interest rate 50 bps to 3% as expected. Less expected were Governor Alan Bollard's comments that the steep easing cycle is coming to an end, with the economy predicted to trough mid-year. There's room for further small adjustments, he said.

Hallenstein Glasson Holdings fell 2% to NZ$1.95. Fisher & Paykel Healthcare, whose shares have dodged much of the slide in market value in the past few months, fell 2.6% to NZ$3.37. Fisher & Paykel Appliances fell 3.7% to 52 cents.

Tyndall's Ward said Warehouse's plight is a symptom of a wider malaise - a tough retail sector. He said today's central bank rate cut hasn't budged longer-term fixed-rate mortgage rates. He said the margin above swaps of 5-year debt is 2.5 percentage points.

Restaurant Brands New Zealand was unchanged at 70 cents after the fast-food franchise holder today said same-store sales rose 3.9% in the fourth quarter, with total revenue in the 13 weeks ended March 2 climbing 1.5% to US$77.2 million.

Businesswire.co.nz

Comments from our readers

No comments yet