MARKET CLOSE: NZ shares fall; Auckland Airport drops on forecast, NZS slips

Thursday 21st May 2009

Shares fell as doubts about a global recovery weighed on equity markets worldwide and Auckland International Airport trimmed its forecast for retail revenue as passenger numbers dwindle.

The NZX 50 Index fell 24.77, or 0.9%, to 2776.31. Within the index, 29 stocks fell, 12 rose and nine were unchanged. Turnover was $84 million.

Auckland Airport (NZX: AIA ) fell 3.6% to $1.61, the lowest price this year after the nation’s busiest gateway said revenue from the retailers in its terminals would be between $90 million and $93 million this year, below the market consensus around $104 million. Retail accounts for about 28% of the airport’s sales.

“Auckland Airport doesn’t help investors’ confidence,” said Paul Harrison, who helps manage $2.5 billion at BT Funds Management. “We’ve run through the (first-quarter) earnings season and there’s a hiatus while we wait for some more detail about this current quarter. People are starting to worry about the June results.”

Shares ended lower on Wall Street after minutes of the Federal Reserve’s policy meeting in April showed policy makers saw “significant downside risks” to the outlook for the U.S. economy. The minutes show the fed considered widening its quantitative easing measures, printing more money to prop up the world’s biggest economy. Japan’s Nikkei 225 Index fell 0.9% today.

NZ Farming Systems Uruguay (NZX: NZS ) dropped 15% to 59 cents, the biggest decline on the index, having been the largest gainer yesterday. Harrison said there’s a lack of certainty about its business case and concern it may need to raise more capital as equity is dwarfed by its debt. The shares are down 8.3% this year.

APN News & Media (NZX: APN ), the Australia-based publisher of the New Zealand Herald, fell 7.5% to $1.48 on the NZX. The newspaper group raised A$83 million selling shares to institutions and will seek a further A$16 million selling shares to individuals to repay debt.

NZX (NZX: NZX ) edged up 0.1% to $8.25, bringing its gain this year to 52% after the manager of New Zealand’s stock exchange announced plans to move into commodity trading in the next 12 months, extending a drive into the agricultural that has seen it snap up rural data and media companies.

Contact Energy (NZX: CEN ), the biggest utility on the NZX 50, fell 1.7% to $5.85. Energy Minister Gerry Brownlee today said he wants all power generators to hold their prices unchanged until an initial review of the electricity market had been completed in September. The comments come after a Commerce Commission report found the nation’s four biggest generators, including Contact, gouged customers by an extra $4.3 billion in charges over the 5 ½ years through mid-2007. The report cleared them of antitrust behavior.

Ryman Healthcare (NZX: RYM ) climbed 0.6% to $1.63. The retirement village operator’s chairman David Kerr today said it has strong presales of its villages and sufficient cash flow to cover spending on “new villages without the need to raise fresh capital or to increase debt.” Ryman today posted an 8.9% drop in full-year profit to $66.1 million.

Fisher & Paykel Appliances (NZX: FPA ) fell 1.6% to 63 cents and has dropped 54% this year. The manufacturer, which is relying on short-term extensions to its debt facilities, is due to post earnings next week and may also announce how it intends to refinance its debt. The company will post a net loss of $5.3 million or earnings before one-time items of $27 million, according to estimates compiled by Reuters.

“They really need to raise capital,” Harrison said. “It’s all very well selling property and leasing it back but that’s just replacing one debt obligation with another,” he said.

Sky City Entertainment Group (NZX: SKC ) climbed 0.7% to $2.90. The stock has an average rating of ‘outperform,’ based on estimates from nine analysts.

Businesswire.co.nz

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