NZX CLOSE: NZ shares sink as dollar stays high; Cavalier, FBU, FPH fall

Wednesday 7th October 2009

New Zealand shares fell, missing a global rally that lifted equity markets across Asia, as a high currency weighed on companies with offshore sales and large sell orders drive down leaders such as Fletcher Building.

The NZX 50 declined 10.36, or 0.3%, to 3141.19, the third decline in four days. Within the index, 13 stocks fell, 30 rose and seven were unchanged. Turnover was $82.9 million. Benchmarks in Japan, Hong Kong and Singapore gained more than 1% today, following gains on Wall Street and in Europe.

Cavalier Corp. fell 3.9% to $2.45. The carpet maker is rated ‘hold’ based on four recommendations compiled by Reuters. The shares have climbed 38% in the past six months.

Fletcher Building, the nation’s biggest construction company, fell 2% to $8.22. About 3.8 million shares changed hands today, the biggest daily volume in more than a month. Telecom Corp. fell 2.3% to $2.52, the lowest close since late May, with 7.4 million traded.

“There’s been some fairly large net sellers in the leaders,” said Paul Robertshawe, who manages about $250 million at Tower Asset Management.

Robertshawe is anticipating the round of annual meetings over the next two months for more guidance from companies, after many gave little information on the outlook with their annual results. “If you look at some of the data we’ve seen, it still indicates a pretty tough third quarter,” he said.

The kiwi dollar recently traded 73.44 U.S. cents, having climbed from below 50 cents in March, and some strategists say it is heading higher. The New Zealand dollar gained to a post-float high against the pound, denting the value of exports such as meat to the U.K.

Fisher & Paykel Healthcare, which gets almost 80% of its revenue in U.S. dollars, slipped 0.3% to $3.16. The shares have declined almost 4% this month. Delegat’s Group, which exports Cloudy Bay brand wines to the U.K., fell 0.8% to $2.43.

Pyne Gould Corp. rights tumbled 25% to 0.009 cents, with 19.1 million changing hands. The headline shares were unchanged at 42 cents. Some shareholders have sold the rights rather than participate in the investment group’s capital raising.

NZX Ltd., the stock exchange operator, rose 2.3% to $8.18 a day after announcing the acquisition of Australia’s Clear Grain Exchange to expand into other farm commodities. Chief executive Mark Weldon says the exchange will be used as a template to roll out other agricultural commodities.

NZ Farming Systems Uruguay, which develops dairy farms in South America using intensive New Zealand farming techniques, climbed 2.2% to 46 cents after the price of milk powder rose for a third straight month in Fonterra Cooperative Group’s online auction, adding to signs prices have revived from their lows this year.

The average price of milk powder gained 5.7% to US$3,022 per metric ton, the first time it’s been above US$3,000 in 13 months.

With the global recovery setting in, “users of milk powder are restocking and replacing their depleted stockpiles as they look to the future,” said Doug Steel, agribusiness economist at Westpac Banking Corp. “It’s more good news that there’s demand for our products and people are buying it at higher prices.”

PGG Wrightson, New Zealand’s largest rural services company, gained 1.6% to 63 cents.

Businesswire.co.nz

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