MARKET CLOSE: NZX 50 falls for 2nd day; Fletcher, FPH drop

Friday 22nd May 2009

Shares fell for a second day, as global equity markets were rattled by speculation America’s AAA credit rating is under threat and the outlook for economic recovery has dimmed. Fletcher Building and Fisher & Paykel Healthcare were among decliners.

The NZX 50 fell 15.76, or 0.6%, to 2760.54. Within the index, 25 stocks fell, 15 rose and 10 were unchanged. Turnover was a lackluster NZ$58 million.

Fletcher Building (NZX: FBU ), which sells roofing tiles and laminated board in the U.S., fell 1.8% to $6.43. F&P Healthcare (NZX: FPH ), which gets 80% of revenue in U.S. dollars, fell 2.5% to $3.10 as the kiwi dollar climbed to 61.31 U.S. cents.

TrustPower (NZX: TPW ) declined 1.9% to $7.65 after Energy Minister Gerry Brownlee said power prices won’t increase over the next few months as the government decides its response to the a five-year study of the electricity market released yesterday. Separately, chief executive Keith Tempest announced his resignation today.

Infratil (NZX: IFT ), which holds a controlling stake in TrustPower, fell 1.8% to $1.61.

The Standard & Poor’s 500 slipped 1.7% to 888.33 in New York yesterday. Today in Asia, Japan’s Nikkei 225 Index fell 0.4% to 9225.81, with Sony, which gets a quarter of its sales in the U.S., sliding 2.2%. Australia’s S&P/ASX 200 Index fell 1.4% to 3761.60. BHP Billiton fell 2.6% as prices of resources fell.

“The market’s had a reasonably good run – there’s a bit of negative news and that’s flown through to New Zealand and Australia,” said Alan Moore, who helps manage $250 million at Milford Asset Management.

Fisher & Paykel Appliances (NZX: FPA ), the second-worst performer on the NZX 50 after Nuplex Industries this year, rose 4.8% to 66 cents as speculation mounted that it will announce plans to raise capital with its earnings next week.

“Investors want the company to survive” and will support a placement at the right price, said Rickey Ward, equities manager at Tyndall Investment Management. Any issue will probably be through a discounted share offer or pro-rata offering, he said.

F&P Appliances may raise $150 million to $200 million, according to Forsyth Barr analyst Guy Hallwright. He forecasts a full-year net loss of about $17 million, or earnings before one-time items of $28 million.

Nuplex (NZX: NPX ) was unchanged at 46 cents.

Michael Hill International (NZX: MHI ) climbed 8.3% to 65 cents, leading gainers on the NZX 50. ING Property Trust (NZX: ING ) rose 3.5% to 59 cents.

Pyne Gould (NZX: PGC ) slipped 1.4% to $2.12. The company’s MARAC Finance unit today said it entered a partnership with the New Zealand Automobile Association under which it will offer vehicle finance to the AA’s 1.2 million customers. The accord marks the third such auto-related agreement this month for MARAC.

MARAC is taking advantage of opportunities in the auto finance market after the exit of rivals including GE Capital and GMAC, said Chris Flood, general manager, consumer. “This represents a significant opportunity for us to support AA and AA members and clearly it’s a large database,” Flood said.

Sky City Entertainment Group (NZX: SKC ) fell 0.7% to $2.88. The casino and hotel group, whose shares have an average rating of ‘outperform’ among estimates collated by Reuters, amended the terms of its top-up offer of its share purchase plan, bringing the total that can be raised to $43 million from $35 million.

Businesswire.co.nz

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