NZX CLOSE: Shares fall in busy trading on recovery doubts; TEL, NPX dip

Tuesday 1st September 2009

New Zealand shares fell for a second day amid concern the pace of recovery will be slower than some investors had hoped, with few companies willing to forecast future earnings while posting their annual results. Telecom Corp., Nuplex Industries and NZ Farming Systems Uruguay fell.

The NZX 50 Index fell 13.32, or 0.4% to 3084.68. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $145.6 million, marking it as one of the busiest days this year.

Some 27.9 million Telecom shares changed hands, the biggest volume since August 19, 2008. Telecom (NZX: TEL ) declined 2.2% to $2.69 as the Commerce Commission said it will appeal to the Supreme Court in its case over Telecom’s introduction of its 0867 dial-up prefix in 1999. The regulator is separately investigating a breach of the carrier’s separation undertakings.

“Telecom for a number of years has incurred wrath from a regulatory point of view,” said Rickey Ward, an equities manager at Tyndall Investment Management. “It doesn’t appear that’s been removed.”

Nuplex (NZX: NPX ), the specialty chemicals maker, shed 3.2% to $2.40 and tapmaker Methven (NZX: MVN ). declined 3.8% to $1.54.

Tyndall’s Ward said the earnings seasons has shown companies did better than analysts expected, but the brokerages “were incredibly pessimistic and the outlook still alludes to the fact that it’s a very uncertain environment.”

“Companies are very reluctant to give forward-looking guidance,” he said.

Australia & New Zealand Banking Group (NZX: ANZ ) rose 1.7% to $26.75, following its ASX listed shares higher after the lender yesterday said underlying profit in the 10 months through July was “slightly above” the year-earlier figure as growth in home lending.New Zealand was the only market where bad loan provisions increased.

NZ Farming Systems (NZX: NZS ) fell 2.4% to 41 cents, with some 35.7 million shares changing hands. NZX Regulation said it has referred concerns to the Securities Commission that the company’s financial statements included the phrase “fudge this,” in what appears to be an internal note inadvertently left in the published version.

PGG Wrightson (NZX: PGW ) climbed 4.3% to 73 cents from the six-month low it reached yesterday. Ward said there are question marks over the strength of Wrightson’s balance sheet and the prospects for equity raising.

Windflow Technology (NZX: WTL ), the pioneer two-bladed wind turbine maker, tumbled 12% to $1.30 after warning that non-payment of invoices by its main client, New Zealand Windfarms, will "shortly become material" if further payments are withheld.Windfarms, which last week said there was an uncertainty about its ability to pay debts as they fall due, as it hadn’t finalized its funding strategy, tumbled 13% to 58 cents.

Pyne Gould Corp (NZX: PGC ) declined 4.2% to $1.36 after responding to an NZX price inquiry on a surge in its shares.

“PGC believes some investors’ confidence would have been buoyed by the fact that MARAC reported a profit, even though the group result recorded a loss primarily because of write down of certain property development loan assets, and that this could have added to the price recovery.”

Businesswire.co.nz

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