NZX CLOSE: NZ shares join global Dubai wobble; FPA slides on loss

Friday 27th November 2009

New Zealand shares joined a global tumble, sparked by Dubai World’s announcement that it wants to renegotiate its loan terms. Fisher & Paykel Appliances led the decline after posting a first-half loss and forecasting a dimmer full-year outcome.

The NZX 50 Index fell 32.87, or 1.1%, to 3094.43. Within the index, 38 stocks fell, four stocks rose and seven were unchanged. Turnover was $ million.

Shares tumbled across Asia today, with no guidance from a U.S. market shut for Thanksgiving. Japan’s Nikkei 225 dropped 1.8% to 9212.13 in early afternoon trading, Hong Kong’s Hang Seng shed 2.7% and Australia’s S&P/ASX 200 fell 2.5%. Shares of lenders tumbled on the ASX and the NZX.

Dubai World, which has liabilities of US$59 billion, this week sought a “standstill” agreement from creditors. Moody’s Investors Service and Standard & Poor’s cut the ratings on Dubai state companies yesterday. Credit default swaps soared across the Gulf states.

“There’s nervousness throughout equity markets and we’re a part of that,” said Rickey Ward, equity manager at Tyndall Investment Management. “There are concerns about the sovereign risk and within the banking sector.”

F&P Appliances sank 7.7% to 60 cents, leading the benchmark index lower, after posting a first-half loss and lowering its forecast for the full-year. The net loss of $82.4 million included a $55.6 million charge against its North American business.

“It was a bad day to come out with a bad result, and a result that guides the market down further to boot,” Tyndall’s Ward said.

Smartpay Ltd. fell 4.6% to 4 cents after turning to a first-half profit after finalizing the acquisition of ProvencoCadmus. Net profit was $353,000 in the six months ended Sept. 30, from a $2.7million loss. No dividend is being paid.

Warehouse Group dropped 2.4% to $4.05 after the biggest retailer on the NZX 50 said it will consider “any appropriate capital management initiative” in the New Year. Chairman Keith Smith told the annual meeting today the retailer will “continue to manage its capital structure with the intention of maintaining a conservative gearing ratio.”

Abano Healthcare rose 0.8% to $6.05. The healthcare clinic investor was voted company of the year by the Deloitte Management Magazine Top 200 Awards, announced last night. The company expects net operating earnings in the six months through Nov. 30 of between $3.1 million and $3.7 million, according to its shareholder newsletter, released to the NZX today.

Lenders tumbled, following their Australian shares lower. Westpac Banking Corp. declined 4.1% to $29.50 and Australia & New Zealand Banking Group fell 3.2% to $27.25. PGW Wrightson’s renounceable rights began trading today and were unchanged at 10 cents. Wrightson’s ordinary shares rose 0.3% to 56 cents.

Businesswire.co.nz

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