NZX CLOSE: NZ shares fall with global slide; Fletcher, AIA decline

Monday 2nd November 2009

New Zealand shares fell, joining a global slide after unexpectedly weak consumer spending in the U.S. sapped demand for equities and drove down prices of commodities such as crude oil. Fletcher Building and Auckland International Airport paced the decline.

The NZX 50 Index fell 31.88, or 1%, to 3183.74, the biggest decline in more than a month. Within the index, 33 stocks declined, four rose and 13 were unchanged. Turnover was a lacklustre $58.6 million.

The Standard & Poor’s 500 dropped 2.8% on Friday in New York after Commerce Department figures showed U.S. consumer spending fell 0.5% in September, the first decline in five months. Adding to weak sentiment today, New-York based commercial lender CIT Group Inc. filed for bankruptcy. Japan’s Nikkei 225 Index fell 2.3% and Australia’s S&P/ASX 200 Index declined 2.2% to 4541.

The market “needs to find a level that investors are happy to traded at,” said Mark Brown, who helps oversee $1.1 billion at ING New Zealand. “We also need to see a bit more earnings coming through to justify the strong run that we’ve had.”

The NZX 50 has gained about 18% this year.

Fletcher Building, the nation’s biggest construction company, fell 2.4% to $8.12, having advanced from as little as $5.15 in March. Steel & Tube Holdings, which sells steel building products such as reinforcing rods, declined 2.6% to $3.05.

Pan Pacific Petroleum dropped 7.3% to 51 cents, leading oil-related stocks lower, after the price of crude oil fell. Crude traded near a two-week low on concern a faltering global recovery will burn less fuel.

Crude oil for December delivery traded at US$77.65 a barrel in electronic trading on the New York Mercantile Exchange during Asia’s hours. New Zealand Refining fell 2.4% to $5.20 and New Zealand Oil & Gas declined 1.2% to $1.70.

Auckland International Airport shed 2.5% to $1.97 and AMP NZ Office Trust fell 2.4% to 82 cents.

Telecom Corp. fell 0.4% to $2.53 after the biggest phone company on the NZX 50 said the government’s proposed changes to the levy put in place to protect rural customers when the carrier was privatised in the 1990s has “a number of flawed assumptions.”

Infratil Ltd. was among the few gainers, rising 1.2% to $1.65 after announcing its exit from the 90% holding in Luebeck Airport, which failed to meet passenger targets and triggered a put option for the investment group.

Separately today, Infratil’s part-owned Australian energy company, Energy Developments, rejected a takeover offer from private equity firm, Pacific Equity Partners, which an independent valuer deemed inadequate.

Pacific Equity had offered A$2.65 apiece for Energy Developments, which undervalued the company, according to Lonergan Edwards and Associates. Shares of Energy Developments fell 2.1% to A$2.35 on the ASX today.

Sky City Entertainment fell 2.3% to $3.39 and Air New Zealand declined 1.5% to $1.28.

Businesswire.co.nz

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