MARKET CLOSE: NZ shares snap 3-day rally; FPA, Pumpkin Patch slide

Thursday 4th June 2009

New Zealand shares snapped a three-day rally after the nation’s biggest trading partner, Australia, unexpectedly posted a trade deficit, stoking concern its economy is weaker than this week’s GDP figures suggest. Stock markets across Asia dipped as commodity prices fell and data indicated the U.S. economy may take longer to revive.

The NZX 50 Index slid 24.91, or 0.9%, to 2815.71. Within the index, 28 stocks fell, 10 rose and 12 were unchanged. Turnover was $112.9 million.

Fisher & Paykel Appliances (NZX: FPA ), which has soared since finalising its capital raising plans, dropped 8.1% to NZ$1.02, leading the index lower. Children’s clothing chain Pumpkin Patch fell 5.1% to NZ$1.31 and insurer Tower Ltd. fell 23.8% to NZ$1.77.

Australia’s S&P/ASX 200 Index charted a bigger decline than the NZX 50, falling 2% to 3937.80 in late trading after government figures showed an A$91 million deficit in April on lower prices for iron and coal, compared to estimates of a surplus of almost A$2 billion. BHP Billiton, the world’s biggest mining company, shed 4.9% to A$35.23, while Rio Tinto, the third-largest, tumbled 6.5% to A$66.95. The Reuters/Jefferies CRB Index of key commodities fell 2.7%.

The relatively milder sell off in New Zealand shares “is quite a good indicator of the resilience of our market and the absence of highly cyclical companies,” said Barry Lindsay, research manager at First NZ Capital.

Fletcher Building (NZX: FBU ), New Zealand’s biggest construction company, climbed 0.3% to $7, helped by perceptions that “housing is seen to be on the improve,” Lindsay said.

Auckland-based real estate firm Barfoot & Thompson today reported its best month of trading in two years in May, with a 6.2% gain in the average sale price.Low levels of home building activity combined with a pick-up in inbound migration is likely to create a housing shortage, which will support prices in the short-term, Westpac chief economist Brendon O’Donovan said in a report.

New Zealand Oil & Gas (NZX: NZO ) fell 3% to $1.55 after crude oil yesterday tumbled almost 2.5%. Coal miner Pike River Coal (NZX: PRC ) slipped 2.5% to $1.15, joining a slide in resource stocks.

Fisher & Paykel Healthcare (NZX: FPH ), which garners almost 80% of its revenue in U.S. dollars, climbed 1.3% to $3.07 as the New Zealand dollar tumbled from an eight-month high.

Restaurant Brands New Zealand (NZX: RBD ), which has the local KFC, Pizza Hut and Starbucks Coffee franchises, advanced 2% to 98 cents, its second daily gain since reporting a 4.3% gain in quarterly sales yesterday, helped by the first pick-up in sales of pizza for four years. The shares have surged almost 60% in the past six months. The shares have a dividend yield of about 12%, based on the past 12 months of payments.

ING Property Trust (NZX: ING ) gained 1.8% to 58 cents after yesterday announcing the sale of a College Hill, Auckland property for $7.85 million, in line with its March 31 valuation. The Trust said it is continuing with its capital management strategy of selling non-core properties and using the proceeds to repay debt.

Australia’s Telstra Corp. climbed 2.8% to A$4.11. Rival Optus yesterday said Telstra should be broken up as part of government plans to upgrade that nation’s phone networks.

Jeweller Michael Hill International (NZX: MHI ) rose 1.5% to 66 cents and carpet maker Cavalier (NZX: CAV ) climbed 1.1% to $1.93.

Wood products manufacturer Tenon (NZX: TEN ) fell 0.9% to $1.05 after chief executive Mark Eglinton resigned after four years leading the company from the US. The wood products company is now searching for a new CEO to replace Eglinton, who will leave the company in September, chairman Luke Moriarty said in a statement.

Businesswire.co.nz

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