NZX CLOSE: NZ shares fall for 4th day; Contact, oil stocks fall

Wednesday 9th December 2009

New Zealand shares fell, pushing the NZX 50 Index lower for a fourth day amid global jitters that followed Greece’s credit rating downgrade, losses at Dubai World and weaker-than-expected economic growth in Japan. Contact Energy fell on concern electricity reforms will stoke competition.

The NZX 50 declined 9.66, or 0.3%, to 3127.64. Within the index, 20 stocks fell, 19 rose and 11 were unchanged. Turnover was $75.9 million.

Stocks fell across Asia, following declines in the U.S. and Europe after Fitch cut Greece’s credit rating by one notch to BBB+ and kept the outlook ‘negative.’ Separately, Dubai World’s property developer unit Nakheel had a first-half loss of $3.65 billion loss, according to Bloomberg. In Asia today, figures showed Japan’s gross domestic product rose at an annual rate of 1.3%, less than the initial estimate of 4.8%. The Nikkei 225 fell 1.3% in Tokyo.

“It’s making investors a little nervous to see what countries might be under pressure from too much debt,” said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. The gloomy news overnight is likely to be "a very short-term issue" for major equity markets, he said.

Contact Energy fell 1.2% to $5.83. Energy Minister Gerry Brownlee an asset ‘swap’ among state-owned power companies that will see Genesis Energy take over Meridian Energy’s two Tekapo power stations, potentially bolstering competition in the South Island, Contact’s most profitable region. Brownlee also announced a mandatory hedging proposal, forcing utilities including Contact to offer uncommitted power via tradable contracts.

TrustPower was unchanged at $7.30. Vector Ltd., the power and gas distributor, fell 1% to $1.92.

Pan Pacific Petroleum dropped 3.6% to 54 cents after the price of crude oil rounded out a five-day slide yesterday. New Zealand Oil & Gas fell 1.1% to $1.77.

Pumpkin Patch, the children’s clothing chain, rose 1.5% to $1.98 after government figures showed kiwis spending on credit and debit cards at retailers rose to the highest in a year in November.

Spending on electronic cards at retailers rose 0.7% in November to an unadjusted $3.86 billion, according to Statistics New Zealand, from being unchanged in October. Fuel was the main contributor.

Restaurant Brands, the fast-food franchise company, rose 1.3% to $1.60.

Weighing on stocks today, BioVittoria Ltd., the Hamilton-based biotechnology firm, pushed out the closing date for its initial public offering, making it the third float in a month to hit speed wobbles. The company, which is looking to tap new investors on the stock exchange for some $20 million to commercialise a sweetener extract, extended it closing date to Dec. 29 from Dec. 11.

“IPOs have to be priced at the right level,” Williamson said. “Investors right now are risk averse – that’s maybe why BioVittoria was a little slow. A number of investors would be waiting for the company to become more mature before considering it.”

Property investor DNZ Property Fund and dairy company Synlait Milk Ltd. both put off their IPOs recently.

SmartPay Ltd. gained 2.4% to 4 cents after the merchant services provider announced an agreement to supply 106 Paper Plus stores and 58 Take Note stores with its systems.

Skellerup Holdings, which makes rubber goods and milking equipment, gained 4.1% to 51 cents, having declined 2% yesterday. The manufacturer is rated ‘outperform’ based on the consensus of three recommendations compiled by Reuters. Carpet maker Cavalier Corp. climbed 1.6% to $2.54.

Businesswire.co.nz

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