MARKET CLOSE: NZX 50 falls for 4th day; FPA, MHI drop

Thursday 14th May 2009

Shares fell, sending the NZX 50 Index lower for the fourth straight day, after weak US retail sales stoked concern that economic recovery is further away, driving down equities from New York to Tokyo.

The NZX 50 fell 35.44, or 1.3%, to 2776.12. Within the index, 33 stocks fell, nine rose and eight were unchanged. Turnover was $137 million, making it one of the biggest trading days this year.

F&P Appliances (NZX: FPA ) fell 7.7% to 60 cents and Michael Hill International (NZX: MHI ) declined 6.1% to 62 cents. PGG Wrightson (NZX: PGW ) slid 5.4% to NZ$1.40.

The Standard & Poor’s 500 fell 2.7% yesterday after US Commerce Department figures showed retail sales unexpectedly fell 0.4% in April. In Asia today, Japan’s Nikkei 225 Index dropped 2.7% to 9084.55, with Sony declining 7%.

Hong Kong’s Hang Seng slipped 3.2% to 16508.08. In Sydney, the S&P/ASX 200 Index dropped 2.9% to 3744.50. Leighton Holdings, Australia’s biggest builder, dropped 7.6% to A$22.47. Rio Tinto, the world’s third-largest mining company, tumbled 11% to A$57.80.

“There’s so much uncertainty out there,” said Alan Moore, who helps manage $250 million at Milford Asset Management. “The underlying feeling is things are slowly turning for the better” though like an ocean liner, the global economy “takes a helluva lot of time to turn.”

The BNZ Capital – Business NZ Performance of Manufacturing Index, out today, rose 1.8 points to 43.7 in April, the highest since September, while still in contraction.

Still, Bank of New Zealand economist Craig Ebert said caution is needed in seeing a recovery trend “when the economic and financial backdrop remains as problematic as it is.”

“To presume the gargantuan global de-leveraging process…is suddenly all over and done with seems premature to say the least,” Ebert said.

Tourism Holdings (NZX: THL ), the campervan operator, rose 4% to 52 cents. Prime Minister John Key says the marketing campaign to lure more Australian tourists may result in a $65 million payback from increased visitor numbers. The $5 million marketing effort between the government and Air New Zealand is expected to attract 35,000 more visitors from Australia, Key told a hotel industry conference in Auckland today.

Air New Zealand (NZX: AIR ) climbed 0.9% to $1.09.

Goodman Property Trust (NZX: GMT ) rose 2.5% to 82 cents after the property investor reported a distributable profit of $83.8 million in the year ended March 31, up from $68.7 million a year earlier. Net income turned to a loss of $74 million, reflecting a $172.8 million reduction in the value of its property portfolio.

“The whole of the property sector is going to go through this agony at the moment,” Milford’s Moore said.

Rubicon (NZX: RBC ) fell 4.2% to 68 cents after Knott Partners' partial takeover offer was cleared by the Overseas Investment Commission. Knott and related funds aim to lift their stake to 28% from 18.5% though Grant Samuel’s valuation of Rubicon is $1.15 to $2.26 each, well above the 70 cent offer.

Sanford (NZX: SAN ) rose 0.5% to $5.58 as the New Zealand dollar eased, helping lift the value of its export revenue. The kiwi dollar recently traded at 59.03 US cents, from more than 60 cents.

Businesswire.co.nz

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