NZX CLOSE: NZ shares edge lower; WHS dips

Wednesday 30th December 2009

New Zealand shares fell in thin summer holiday trading and after BioVittoria became the third initial public offering to falter, underpinning lacklustre demand for equities. Warehouse Group paced falling retailers.

The NZX 50 Index fell 4.217, or 0.1%, to 3220.911 and has gained 2.4% this month. Within the index, 13 stocks fell, 11 rose and 25 were unchanged. Turnover was $49 million.

Warehouse fell 1.4% to $4.15 and jeweler Michael Hill International declined 1.5% to 66 cents as investors await evidence of profitable sales over the peak festive season as retailers cut prices before Christmas to lured customers. Paymark is to release data on electronic trading for the period in early January.

"The retail sector would certainly like the turnover that's gone through," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "The big question mark is the margin that it has gone through at. There have been some bargains but investors are more concerned with the bottom line."

Clothing retailer Postie Plus Group fell 2.5% to 39 cents.

BioVittoria today said its $20 million IPO had failed to garner even $8 million, its minimum. That's the third company after Synlait and DNZ Property that won't be rushing onto the NZX.

"It's extremely disappointing for NZX I'm sure and also the broking community," Williams said. "Demand is not there for these new issues."

Allied Farmers, which boosted shares on issue to more than 1.9 billion from 37.7 million with the purchase of Hanover Finance assets, fell 5% to 11 cents, edging closer to its record low 10 cents.

Williams said buyers had been active in the stock since the transaction, to pick up stock at low prices. Still, "we've yet to see sellers come out in volume" and the shares may drift back down to 10 cents, he said.

Mainfreight Ltd. was the biggest decliner on the NZX 50, falling 1.8% to $5.55.

Pumpkin Patch, the children's clothing chain, rose 0.5% to $2.03, holding onto gains that have made it one of the best-performing shares on the NZX 50 this year with a gain of more than 110%. The retailer posted a full-year loss of $26.7 million last year reflecting costs to exit unprofitable U.S. stores though investors have welcomed its decision to limit losses with the move.

Carpet maker Cavalier Corp. was the biggest gainer, rising 3.9% to $2.70. Air New Zealand rose 1.7% to $1.20 and Guinness Peat Group gained 1.2% to 84 cents.

(BusinessWire)

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