NZX CLOSE: NZ shares fall; Wrightson dips on capital plan, CAV drops

Friday 20th November 2009

New Zealand shares fell, with rural services group PGG Wrightson declining after announcing its capital-raising plans, as investors prepare for revival in initial public offerings and share sales. Carpet maker Cavalier Corp. led the decline.

The NZX 50 Index fell 27.54, or 0.9%, to 3133.62, the third decline in four sessions. Within the index, 29 stocks fell, eight rose and 12 were unchanged. Turnover was $66 million.

PGG Wrightson fell 1.5% to 64 cents after announcing a rights issue to raise $180.1 million, allowing the company to slash debt and bring on China’s Agria Corp. as its biggest shareholder. The underwritten issue is nine shares for every eight held at 45 cents apiece.

“You would think freed of debt concerns and not having to spend what I imagine was quite a lot of time dealing with those concerns, management should be able to drive better results,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “The company is quite different from what it was.”

Pyne Gould Corp. fell 2.1% to 47 cents. The rural investment and finance company with ambitions to become a bank, will take up the Wrightson entitlement from its 20.7% stake, ending up with 18.3% of the enlarged company.

NZ Farming Systems Uruguay, which is due to pay a performance fee to Wrightson, shed 2.3% to 43 cents.

Cavalier fell 8.4% to $2.30 and Contact Energy fell 2.3% to $5.91.

Mainfreight Ltd fell 1.6% to $5.55, the second daily decline after the biggest trucking company on the NZX 50 yesterday posted a 37% slump in half-year profit as its U.S. operations continue to struggle.

Rakon Ltd, the manufacturer of crystal oscillators used in navigation systems and mobile phones, gained 1.7% to $1.18.

Warehouse Group, the biggest retailer on the NZX 50, fell 2.2% to $4.08.

Businesswire.co.nz

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