NZX CLOSE: NZ shares, joining global slide; Wrightson sinks

Wednesday 21st October 2009

New Zealand shares fell from a 13-month high, joining a global tumble after U.S. housing data raised doubts about the potential pace of economic recovery.

PGG Wrightson led the decline after being forced to defend new shareholder Agria and challenge what it said were erroneous media reports.

The NZX 50 Index fell 34.34, or 1.1%, to 3218.22, the first decline in six sessions. Within the index, 31 stocks fell, four rose and 15 were unchanged. Turnover was $88.4 million.Stocks on Wall Street fell, with the Dow Jones Industrial Average sinking 0.5%, after Commerce Department figures showed housing starts rose a lower-than-expected 0.5% last month.

Wrightson tumbled 9.1% to 70 cents after chairman Keith Smith said his company had been aware that Agria, which is buying a 13% stake, was late in filing its 2008 annual report in the U.S. and faced class action lawsuits related to the company’s 2007 initial public offering.

“You would rather it didn’t have these issues surrounding it – especially the filing of its (Agria’s) accounts,” said Paul Robertshawe, who manages $250 million at Tower Asset Management. Wrightson will also be tapping shareholders for a chunky volume of new stock, which is weighing on the company, he said.

Sky Network Television declined 3.7% to $4.72 and Infratil Ltd. slid 3.6%. Cue Energy Resources traded at 34 cents in its first day on the NZX, with about 134,000 shares changing hands. The oil explorer, which has a stake in the Maari oil field, already trades on the ASX.

Pike River Coal, which is developing a coal mine in the South Island, rose 2.7% to $1.16 after saying it may need to raise $20 million via a placement or negotiations with customers to meet its operational costs. It is awaiting final approval from Liberty Harbor to extend a convertible bond. The company needs to fund the developments ahead of making coal sales which will provide its cash flow.

Rakon Ltd. fell 3.2% to $1.21 as the kiwi dollar traded at around 75 U.S. cents and Reserve Bank Governor Alan Bollard said a high kiwi would be an impediment to raising interest rates. A high currency erodes the value of overseas revenue.

Sky City Entertainment Group fell 2.5% to $3.46 and Freightways Ltd. fell 2.5% to $3.10.

Businesswire.co.nz

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