MARKET CLOSE: Stocks mixed; Fletcher gains, Skellerup tumbles

Thursday 9th April 2009

Stocks ended the short Easter week mixed, as Fletcher Building gained amid tentative signs of a housing market thaw and Skellerup Industries tumbling after cutting its profit forecast.

The NZX 50 Index rose 2.24, or 0.1%, to 2571.14, snapping two days of declines. Within the index, 17 stocks rose, 24 fell and nine were unchanged. Turnover was $83.8 million.

Fletcher Building climbed 2.5% to $6.20 and steel building products company Steel & Tube Holdings gained 2.3% to $2.66. The volume of house sales jumped last month while the median price edged higher, according to Real Estate Institute figures today. Companies linked to the construction industry also gained in Australia, with Boral up 3.8% to A$3.79 and CSR climbing 1.7% to A$1.23.

Stocks rallied across Asia today, with the Nikkei 225 Index jumping 3.4% to 8881.11 after the government announced a bigger-than-expected US$154 billion stimulus plan. Australia's S&P/ASX 200 rose 1.2% to 3662.80 even after figures showed the jobless rate across the Tasman rose to a 5-year high 5.7%. Stocks rebounded on Wall Street overnight.

"People at the moment are probably just really looking for some signs of stability, signs that it isn't going to get any worse," said Craig Brown, who helps manage about $2.5 billion at ING New Zealand. "There's a lot (of bad news) built into prices already."

Sky Network Television, the nation's biggest pay-TV company, rose 1.3% to $3.90 after the company confirmed the widely expected news that it won the rights to host the 2011 Rugby World Cup.

Skellerup tumbled 22% to 51 cents after the manufacturer of rubber goods and milking equipment cut its full-year profit forecast because of a downturn in the U.S. and Europe. Its shares dropped 11%. Net income in the year ending June 30 will be between $8 million and $9 million, down from the guidance in February of $11 million, it said.

That implies second-half earnings will be as little as $1.2 million.

Investors are scrutinising evidence of weakening earnings as U.S. corporate line up to release their first quarter earnings. Companies on the S&P 500 will. On average, post a 37% decline in profit, according to Reuters data.

Nuplex slipped 3.3% to 29 cents as shareholders prepare for the seven-for-one rights offer at 23 cents apiece. The rights are currently trading at 3.4 cents, suggesting you're getting then for 26.4 cents. ING's Brown said that will encourage some investors to sell the shares at 29 cents to buy the rights as "there's a little bit of an arbitration game there at the moment."

Freightways Ltd. fell 1.1% to $2.67 after completing a $45 million placement at a 12% discount to repay debt and strengthen its balance sheet. AMP Capital Investors today disclosed it had become a substantial holder of the stock after the placement.

Businesswire.co.nz

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