MARKET CLOSE: NZ shares fall to 2010 low

Tuesday 19th January 2010

New Zealand shares fell, pushing the NZX 50 Index to its lowest level this year, as concern about the prospects of tepid earnings in 2010 weighed on equity markets across Asia. Telecom led the decline.

The NZX 50 fell 19.51, or 0.6%, to 3227.59, the third daily decline. Within the index, 25 stocks fell, 14 rose and 11 were unchanged. Turnover of $87.3 million was boosted by turnover in the NZX-listed shares of Telstra.

Shares were broadly lower across Asia. Japan’s Nikkei 225 was down 0.6% to 10782.84 in early afternoon trading and Australia’s S&P/ASX 200 fell 0.6% to 2966. With U.S. markets closed on Monday for the Martin Luther King Jr. holiday, markets in Asia got little overnight direction.

“There wasn’t a lot in the way of leads due to the holiday in the US with very thin trading volumes continuing to exaggerate trading action,” said Ben Potter, analyst at IG Markets, in a report. “Concerns about earnings growth for 2010” are weighing on stocks.

Telecom (NZX: TEL ) fell 2.98% to $2.45. Profit before one-time items may decline 12% this year, according to estimates compiled by Reuters. The stock is rated ‘hold’ based on the consensus of 14 analysts. Four rate it ‘underperform.’

Among companies to flag little earnings growth, Warehouse (NZX: WHS ) fell 2.5% to $3.88 today. Chief executive Ian Morrice said earlier this month that first-half earnings would be “flat” after a disappointing Christmas.

NZ Farming Systems (NZX: NZS ) fell 2% to 46 cents and Australian food-maker Goodman Fielder dropped 2% to $1.95.Clothing retailer Hallenstein Glasson (NZX: HLG ) fell 1.2% to 3.21. Investment group Guinness Peat Group (NZX: GPG ) fell 1.1% to 89 cents.

Pyne Gould (NZX: PGC ) led gainers, rising 4.2% to 50 cents in its second day on the NZX 50, where it has replaced Skellerup (NZX: SKL ). Inclusion in a benchmark index makes a stock eligible for inclusion in index-weighted indexes.

Pike River Coal (NZX: PRC ) jumped 3.9% to $1.06. Last week Deutsche Bank raised its forecast for coking coal prices by 36% to US$175 a tonne. Pike aims to begin shipping coking coal from its South Island mine in the first half of this year.

Among other stocks, EFTPOS services provider SmartPay (NZX: SPY ) climbed 2.3% to 4 cents after the company said its Cadmus brand terminal upgrade was chosen by Auckland’s Co-Op Taxis to upgrade more than 800 vehicles.

Businesswire.co.nz

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