Market Close: Stocks mixed; Sky up, Michael Hill falls

Friday 9th January 2009

New Zealand stocks were mixed. Sky Network Television, singled out in an analyst survey this week as a strong performer for 2009, led gainers while Michael Hill International fell after the jeweler said first-half profit fell.

The NZX 50 Index rose 0.763, or 0.03%, to 2757.414. Within the index, 25 stocks fell, 12 rose and 13 were unchanged. The value of trading was a lower-than-average NZ$46.5 million, with about 22 million shares changing hands.

Sky Network rose 2.6% to NZ$3.90, paring its gain the past six months to about 10%. The pay-TV operator "has a sound balance sheet and strong cash flows, First NZ Capital head of research Rob Bode told the Dominion Post. The company may also benefit from the change of government, which may curtail state-owned TV's expansion plans.

Michael Hill fell 5.3% to 54 cents after the chairman said profit was "materially below" the previous year's as tough trading conditions forced it to discount while currency movements drove up costs. "Sales targets were difficult to achieve in the tough retail conditions we were facing, especially in New Zealand and Canada," he said.

Wellington Drive Technologies, which make energy efficient fans and motors, tumbled 28% to 13 cents after the company announced plans to raise NZ$11.4 million in a share placement at 10 cents apiece, while forecasting a second year of losses. Sales are expected to surge 150%.

Goodman Property Trust rose 2.1% to 97 cents. The property investor this week completed refinancing of more than NZ$900 million in three-year debt, giving it funding certainty in tight credit markets.

Guinness Peat Group rose 1.1% to 95 cents. The investment group is worth NZ$1.33 a share, based on a Dec. 22 valuation of its assets, chairman Ron Brierley said this week.

Steel & Tube Holdings, which supplies steel building products, fell 8.1% to NZ$2.85, paring its gain in the past month to about 10% and leading the NZX 50 higher. In November, the company said it expects "a gradual improvement from the construction sector early to mid 2009" as interest rates fall and demand rises for infrastructure projects and commercial activity relating to the 2011 Rugby World Cup.

Port of Tauranga fell 0.3% to NZ$6.50 after rival Ports of Auckland said it processed a record number of containers last month while being "very concerned" about the outlook. The Auckland company has been considering making a bid for Tauranga's container business.

In Australia, the S&P/ASX 200 Index gained 1.1% to 3735.7, as commodity prices rallied, lifting shares of resource companies including BHP Billiton and Newcrest Mining.

Copper for March delivery rose 5% on the Shanghai Futures Exchange and has advanced 15% this week. Crude oil for February delivery gained 2.3% to US$42.64 a barrel.

Japan's Nikkei 225 Index fell 0.3% to 8852.15 in early afternoon trading. Honda Motor fell 2.3% after Moody's Investors Service put the automaker's Aa3 credit rating on review for a possible downgrade. Demand for vehicles has tumbled worldwide and Honda also has to contend with a stronger yen, Moody's said.

By Jonathan Underhill

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