Thursday 22nd April 2010 |
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New Zealand shares fell after Fletcher Building Ltd. announced further cuts to insulation would dent Australian earnings and Contact Energy released figures showing a further loss of customers.
The NZX 50 Index dropped 17.508, or 0.5%, to 3287.461, snapping two days of gains. Within the index, 30 stocks fell, 12 rose and eight were unchanged. Turnover was $94.5 million, reflecting trading in Fletcher and Telecom shares.
Fletcher fell 1.1% to $8.43 after the company said operating earnings from insulation in Australia would fall to $12 million from $23 million a year earlier, as a result of the federal government abandoning its insulation subsidy scheme. The decline mainly reflects one-time costs of $18 million for redundancies and inventory management costs. The company kept its group profit forecast at a range of $278 million to $303 million.
“They are going to take a bit of a hit on Australian insulation,” said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. While it maintained its group-wide annual profit forecast, “it could be nearer to the bottom of the range.”
Shares were weaker across Asia after concerns flared up over Greece’s ability to avert a financial failure, with talks underway on a rescue package, weighing on European equity markets. In the U.S., stronger earnings from Apple Inc., Boeing Co. and Morgan Stanley helped underpin the market, and the Dow Jones Industrial Average eked out a 0.1% gain. Today, Japan’s Nikkei 225 fell 1.2% and Australia’s S&P/ASX 200 Index dropped 1%.
“There’s a few headwinds at the moment, and investors are reluctant to take on new positions,” Williamson said.
Contact, the biggest utility on the NZX 50, fell about 1% to $6.18 after its monthly update showed it continued to shed customers, with a further 2,500 defections to other retailers between February and March. Still, the electricity sector enjoyed much higher wholesale electricity prices in March than over the previous nine months.
Telecom rose 1.4% to $2.18, leading the index higher. APN News & Media, the publisher of the NZ Herald, rose 1% to $3.09.
New Zealand Oil & Gas fell 2.6% to $1.52 and Pan Pacific Petroleum declined 5.3% to 36 cents, leading the index lower, after the price of crude oil fell.New York crude sank as low as US$83.32 a barrel in Asia after a U.S. Energy Department report inventories unexpectedly rose.
Allied Farmers, the finance company that took on Hanover Finance’s loan book, soared 20% to 8 cents after booking $3.4 million from the successful sale of properties in Queenstown, New South Wales and one undisclosed location.
"A number of other transactions for the sale of properties are close to being completed," said chief executive Rob Alloway, in a statement to the NZX.
Pumpkin Patch, the children’s clothing chain, slipped 3.9% to $2.20 and Michael Hill International declined 1.4% to 73 cents.
PGG Wrightson, which gained yesterday in a relief rally after Rural Portfolio Investments sold down its stake, sank 3.4% to 57 cents today.Auckland International Airport fell 1.5% to $1.99. Air New Zealand declined 0.7% to $1.37.
Businesswire.co.nz
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