MARKET CLOSE: NZX50 drops; Tourism Holdings falls, Rakon up

Friday 6th March 2009

New Zealand shares fell, led by Tourism Holdings Ltd. on concern the weakening kiwi dollar won't be enough to spur tourist numbers during the global downturn. Rakon jumped after reiterating the profit forecast it made in November.

The NZX 50 Index declined 20.361, or 0.8%, to 2471.04, the first decline in three days. Within the index, 25 stocks fell, 12 rose and 13 were unchanged. Turnover was NZ$68 million.

New Zealand stocks fared better than Wall Street, overnight, when the Standard & Poor's 500 Index plunged 4.3%. On Asia today, Australia's S&P/ASX 200 Index was down 1.7% and Japan's Nikkei 225 Index was down 2.9%.

Tourism Holdings shed 13% to 47 cents, bringing its decline this year to 25%. The campervan company last month posted a first-half loss and suspended its dividends, citing a drop-off in demand from the U.K. and Germany.

"The psychology of lower visitor numbers coming here doesn't encourage anyone to buy the stock," said Alan Moore, who helps manage NZ$250 million at Milford Asset Management.

Rakon climbed 14% to 97 cents, making it the biggest gainer on the NZX 50, after the NZX asked the company to explain a 54% price surge over the past two days. Rakon said it couldn't explain the move and remains comfortable with its November forecast for full-year profit of about NZ$4 million.

APN News & Media dropped 7.7% to NZ$1.2 and is down 45% this year after owner Tony O'Reilly failed to find a buyer for his 39% stake. The shares fell today after the Sydney Morning Herald reported that chief executive Brendan Hopkins had sold off half of his own holding in the company over the past four months.

Nuplex Industries fell 1.9% to NZ$1.05 and has tumbled 63% this year. The specialty chemicals maker last month posted a 76% drop in first-half profit amid waning global demand and said it was considering raising more capital via a rights offer.

Skellerup Industries fell 1.8% to 56 cents after the manufacturer of rubber goods and milking equipment, posted a 6.6% gain in first-half profit on increased demand from dairy farmers while warning of deterioration in the second half as global demand remains weak.

"It's the next six months that will probably take the gloss off it," Moore said.

Fletcher Building fell 2.3% to NZ$5.15. New Zealand's largest building company will focus on cost control and preserving cash in the face of weak demand in Australia and the US in 2009, chief financial officer Bill Roest said in notes for a presentation to the ABN Amro New Zealand Day event in Sydney.

Residential markets worldwide are weak "and the positive impacts of government initiatives (are) hard to predict," The company has an "ongoing focus on cost control, managing production capacity and cash management," Roest said.

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