MARKET CLOSE:TWG reports hits market

Wednesday 20th January 2010

New Zealand shares fell for a fourth day, led by property investors including ING Property Trust (NZX: ING ) amid concern proposed changes to tax policy may reduce their ability to claim depreciation on some assets.

The NZX 50 Index fell 0.34, or 0.01%, to 3227.25, the seventh decline in eight sessions. Within the index, 17 stocks fell, 17 gained and 16 were unchanged. Turnover was $120 million, marking it as one of the biggest trading days so far this year.

ING slid 2.5% to 77 cents, leading the index lower. Property for Industry (NZX: PFI ) dropped 2.5% to $1.18 and Kiwi Income Property Trust (NZX: KPT ) declined 1.9% to $1.04. AMP NZ Office Trust (NZX: APT ) fell 1.3% to 76 cents. The NZX Property Group Index fell 1.6% today, the biggest slide of any sector.

A report by the Tax Working Group, proposing reforms of the taxation system, recommends axing depreciation deductions for buildings where evidence shows they don't decline in value, a move that could generate $1.3 billion in new tax revenue every year.

“Some people are looking at the tax report and trying to work out what that means for the market,” said Alan Moore, who helps manage $400 million at Milford Asset Management. “Sales of property are slowing a wee bit.”

Fletcher Building (NZX: FBU ) fell 0.5% to $8.03 and was the most active stock by value of trade today. Steel & Tube Holdings (NZX: STU ), which sells building materials such as reinforcing rods, declined 1.7% to $2.85.

Warehouse (NZX: WHS ) fell 2.3% to $3.79, the lowest since July last year. The shares have declined since chief executive Ian Morrice said this month that Christmas sales hadn’t been as robust as hoped and first-half earnings would be flat.

“Reporting season is coming up – people will be waiting to see that,” Moore said. “Most people would say there are no real obvious bargains in the market,” he said, referring to stock valuations.

Air New Zealand (NZX: AIR ) led advancing shares, rising 4.3% to $1.21 as the New Zealand dollar weakened. The kiwi fell about 1 U.S. cent to trade recently at below 73 cents after government figures showed consumer prices fell in the fourth quarter, reducing the need for the central bank to rush to raise interest rates. A lower currency makes New Zealand a cheaper place to visit.

New Zealand Refining (NZX: NZR ) fell 2.5% to $4.09.

Restaurant Brands (NZX: RBD ), the franchise holder for Pizza Hut, KFC and Starbucks outlets in New Zealand, gained 1.7% to $1.79. The shares have soared 170% in the past 12 months as the company turned around the performance of its Pizza Hut chain and lifted sales at KFC, making up for weaker returns from its Starbucks coffee stores. Last month it reiterated its forecast for annual profit to jump 50%.

Tourism Holdings (NZX: THL ) fell 5.9% to 95 cents. Infratil (NZX: IFT ) gained 1.2% to $1.68.

More on the TWG Report: Property the tax target

Businesswire.co.nz

Comments from our readers

No comments yet