MARKET CLOSE: NZ shares mixed, FPA, Sky City fall, Rakon gains

Friday 26th June 2009

New Zealand shares were mixed after figures showed the economy sank deeper into recession in the first quarter and as investors await second-quarter earnings.

Fisher & Paykel Appliances, Ryman Healthcare and Sky City Entertainment Group led decliners. The NZX 50 index edged down 0.03% to 2770.61.

Within the index, 28 stocks rose, eight fell and 14 were unchanged. Turnover was $86.9 million.

F&P Appliances (NZX: FPA ) fell 2.9% to 66 cents, after raising $142.9 million through a rights issue which closed yesterday, with a shortfall of 4.9% on the offer.

Ryman (NZX: RYM ) slipped 2.5% to $1.56. Navigation system components maker Rakon Ltd (NZX: RAK ) led local gainers, climbing 4.9% to $1.50.

New Zealand’s economy shrank 1% in the first quarter and a revised 1% in the fourth quarter of 2008, reflecting weaker household spending and a slump in manufacturing. Investors are now focused on the second quarter.

“Since the end of March the world has maybe stabilized,” said Andrew Michl, who helps manage $4 billion in New Zealand cash and fixed interest at ING New Zealand.

Telecom Corp. (NZX: TEL ), the biggest company on the NZX 50, slipped 0.8% to $2.65. Still, corporate profits probably haven’t recovered much, said Paul Harrison, equities manager at BT Funds Management.

“There are two different types of company in New Zealand at the moment – those experiencing flattish demand and others doing it tough.”

PGG Wrightson (NZX: PGW ) this week said profit dropped as much as 23% in the year ending June 30, reflecting a slide in spending by dairy, sheep and beef farmers. The shares rose 4.4% to $1.18 today and is down 12% this year.

“We’re in a hiatus waiting for the June reporting,” Harrison said. “Companies have very little visibility going forward. Their order books have become very short.”

Fletcher Building (NZX: FBU ) rose 0.2% to $6.40 after the company announced its Laminex unit will shutter a medium density fibreboard plant in Western Australia because of a downturn in demand. Sky City (NZX: SKC ) slid 2.2% to $2.68.

Harrison said the nation’s biggest casino operators has “quite a few loose holders” of stock after raising $185 million in a share sale earlier this year, even though its balance sheet wasn’t under pressure.

APN News & Media (NZX: APN ), publisher of the New Zealand Herald, rose 6.9% to $1.87, leading the index higher.

Pike River Coal (NZX: PRC ) rose 4.4% to $1.50 as commodity prices jumped. The mining company which has yet to produce any coal is rated ‘outperform’ based on the consensus of analysts polled by Reuters. Earnings will swing to a $38 million profit in 2010, as coal comes on stream, according to Reuters data.

New Zealand Oil & Gas (NZX: NZO ) rose 2.6% to $1.59 as crude oil gained for a second day, reaching US$70.66 a barrel in Singapore. Medical supplies distributor EBOS Group (NZX: EBO ) rose 2.9% to $5.25 and Guinness Peat Group (NZX: GPG ) gained 2.9% to 70 cents.

Businesswire.co.nz

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