MARKET CLOSE: NZX 50 edges lower; Sky City falls after placement

Wednesday 22nd April 2009

New Zealand’s benchmark NZX 50 Index edged lower for a third day, with Sky City Entertainment slipping after its successful placement and some investors trimming their holdings to free up cash in anticipation of more discounted offers.

The NZX 50 fell 1.92, or 0.1%, to 2662.93. Within the index, 17 stocks fell, 16 rose and 17 were unchanged. Turnover was $73.4 million. Nuplex Industries fell 5.3% to 36 cents, its second daily decline after its share placement closed under-subscribed. Pike River Coal was the biggest gainer on the NZX 50, rising 2.6% to 80 cents.

Sky City fell 2.1% to $2.79. New Zealand’s biggest casino operator raised $185 million selling shares to institutions at $2.61 apiece, above the top end of its stated bookbuild range and 8.4% below its trading price before the placement.

Chief executive Nigel Morrison said the issue had attracted investors from overseas as well as gaining strong support in Australia and New Zealand. The demand signals more offshore interest in the local market, with investors taking advantage of a relatively weak kiwi dollar to invest in an economy less damaged by the global slump than big markets like the U.S. and Japan. Foreign investors also sought to participate in Fletcher Building’s $407 million placement this month.

“There’s been some fairly significant offshore interest – there’s new money coming into the market,” said Alan Moore, who helps manage $250 million at Milford Asset Management. “People who took their money out when the currency was strong would now see not a bad buying opportunity to come back in.”

Jeweller Michael Hill International slipped 3.5% to 55 cents and carpet-maker Cavalier fell 2.9% to $1.70.

Among companies likely to seek more capital from investors is Fisher & Paykel Appliances, whose short-term $80 million bank facility comes due at the end of the month. The manufacturer is understood to be working on detail of the plan currently, which is likely to include the offer of new shares.

F&P Appliances was unchanged today at 44 cents, having fallen 67% this year.

Milford’s Moore said gas and electricity distributor Vector may also join the queue to raise capital, with a bond issue more likely.

Auckland International Airport, which raised $50 million in a sale of five-year bonds in February, has $66.9 million of bonds maturing in July. The airport’s shares climbed 0.6% to $1.70 today after reporting total international passenger numbers fell 6.1% last month.

Children’s clothing chain Pumpkin Patch fell 2.5% to $1.15. The shares have climbed 24% so far this year, and the stocks is rated ‘buy’ or ‘outperform’ by three of five analysts who follow the company.

Fisher & Paykel Healthcare fell 1.6% to $3.03. Among gainers, New Zealand Refining rose 1.9% to $6.95, and Skellerup Holdings rose 1.9% 54 cents.

Businesswire.co.nz

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