MARKET CLOSE: NZ shares slip from 10-month high

Wednesday 5th August 2009

New Zealand shares fell from a 10-month high after retailer Hallenstein Glasson Holdings said annual profit tumbled and the kiwi dollar surged above 67 US cents, weighing on companies with US dollar earnings.

The NZX 50 Index fell 8.73, or 0.3%, to 3084.07, only the second decline in three weeks of trading. Within the index, 19 stocks fell, 11 rose and 18 were unchanged. Turnover was $95.4 million.

Hallenstein (NZX: HLG ) fell 1.1% to $2.82 after the owner of the men’s and women’s clothing chains, said profit fell about 23% in the year ended August 1 as it trimmed prices to lift sales, eroding its margins.

“Sales had been achieved through (an) aggressive pricing strategy which had been at the expense of margin,” said chief executive Roy Dillon.

Fisher & Paykel Healthcare (NZX: FPH ), which gets almost 80% of its revenue in US dollars, fell 2.2% to $3.19 as the local currency climbed. The kiwi dollar recently traded at 67.15 US cents, up from 66.66 cents late yesterday after prices jumped at Fonterra’s monthly online auction of milk powder.

NZ Farming Systems Uruguay (NZX: NZS ), which develops dairy farms in South America using intensive New Zealand farming techniques, gained 4% to 52 cents, the biggest advance on the NZX 50.

Fisher & Paykel Appliances (NZX: FPA ), which sells home appliances in North America, Europe and Asia, fell 2.3% to 86 cents. Rakon (NZX: RAK ), which makes components for global positioning equipment, fell 1.4% to $1.38.

Sky City Entertainment (NZX: SKC ), the casino and hotel group, fell 4.1% to $3.31 and was the biggest decliner on the index. The shares have soared 34% in the past month and now trade at 16 times earnings of the past 12 months. Crown (ASX:CWN), Australia’s biggest casino company, trades at a paltry 1.4 times earnings.

Ryman Healthcare (NZX: RYM ) gained 3.4% to $1.84 after listed investment trust Kingfish (NZX: KFL ) said it had reoriented its portfolio to more defensive positioning to ride out the recession, favouring stocks such as Ryman, Wakefield Health and Abano Healthcare.

"If the global recession lasts longer than most expect, the Kingfish portfolio will be reasonably resilient,” said Carmel Fisher, managing director of Kingfish’s manager Fisher Funds.

ANZ (NZX: ANB ) slipped 2.6% to $24.15 and Westpac (ASX:WBC) fell 1.1% to $27.80, mirroring declines in lenders on the ASX as some investors sold the shares after their recent rally. ANZ Bank’s NZX-listed stock had jumped 15% in the past week.

Investment Research Group (NZX: IRG ), a financial services company that trades on the NZAX market, tumbled 64% to 1 cent after saying it was in breach of banking covenants as at March 31 and needs about $500,000 to remedy the breach relating to shareholder funds.

CDL Investments (NZX: CDL ), the property development company that is indirectly a subsidiary of Hong Leong Group’s Singapore-based City Developments, fell 3.9% to 25 cents after announcing an operating loss of $31,000 in the six months to June 30 amid “continued difficult trading conditions.”

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