MARKET CLOSE: Air NZ, Rakon lead shares lower in light trading

Monday 13th July 2009

New Zealand shares edged lower in light trading, led by Air New Zealand Ltd., which fell to a four-month low amid expectations increased rivalry on domestic routes will drive down prices in an already-subdued market.

Air New Zealand (NZX: AIR ) slipped 2.3% to 86 cents on expectations domestic fares have room to decline after Qantas Airway’s low-fare unit Jetstar unit vowed to make up for a glitch-prone launch, offering vouchers for any late flights.

Rakon Ltd (NZX: RAK ) sank 2% to $1.45. The stock is rated a ‘hold’ based on ratings of six analysts compiled by Reuters.

Restaurant Brands New Zealand (NZX: RBD ), the fast-food operator, rose about 2% to $1.03, one of the few store owners to gain today after government figures showed retail sales rose more than expected in May. Excluding autos, core retail sales climbed 1.6%, the biggest gain since February 2007.

Hallenstein Glasson Holdings (NZX: HLG ) slipped 0.4% to $2.55 even after the retail data showed a 12.6% jump in clothing and softgoods in May, as the early arrival of the winter chill sent consumers scrambling for warm clothes.

Still, retail transactions on credit and debit cards fell 1% in June, suggesting the pick-up in May won’t last.

“There’s nothing to drive us on further,” said Stephen Wright, private client adviser at ASB Securities. “Anecdotal evidence you hear from people is ‘everything is depressed in my industry’.”

The earnings season may give investors enough certainty to return to the market and “shouldn’t hold too many surprises,” he said.

PGG Wrightson (NZX: PGW ), the rural services company which has already warned of a drop in earnings for the 12 months through June, gained 1% to $1.06.

NZX Ltd (NZX: NZX ), the stock exchange operator, climbed 2.1% to $7.30, leading the index higher. The shares have climbed 45% this year as the company made profits from asset sales and expanded its sources of revenue.

Contact Energy (NZX: CEN ), the biggest utility on the NZX 50, rose 1.8% to $5.73 and lines company Vector Ltd (NZX: VCT ) rose 1.5% to $2.04.

Sky Network Television (NZX: SKT ) gained about 1% to $4.15.

Australia & New Zealand Banking Group (NZX: ANZ ) fell 1.4% to $19.70, tracking a slide in its ASX listed shares, as fears a U.S. economic recovery is further off drive down shares across Asia.

The NZX 50 slipped 1.39, or 0.1%, to 2736.88, the lowest since late May. Within the index, 16 stocks fell, 16 rose and 19 were unchanged. Turnover was $55.6 million, below last week's average daily turnover of $61 million though up from Friday's $49.5 million.

The S&P/ASX 200 Index fell 1.4% to 3730.90 in Sydney.

Japan’s Nikkei 225 Index fell 2.3% to 9070.75 in early afternoon trading. Hong Kong’s Hang Seng slipped 2.1% to 17343.71 and Singapore’s Straits Times Index declined 1.6% to 2270.89.

Businesswire.co.nz

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