MARKET CLOSE: NZ shares slip for third day as kiwi gains; PGW falls

Tuesday 24th November 2009

New Zealand shares fell, pushing the NZX 50 Index lower for a third day, as the kiwi dollar strengthened and milk processor Synlait abandoned its IPO, citing lack of response from investors. PGG Wrightson led the decline.

The NZX 50 fell 5.36, or 0.2%, to 3107.61. Within the index, 21 shares rose, 13 fell and 16 were unchanged. Turnover was $63.5 million. Up until the benchmark index peaked for the year at 3252.56 on Oct. 20, the NZX 50 had climbed 21% this year.

PGG Wrightson, which is assured the bulk of its capital raising because it has a fully underwritten rights issue for $180.1 million, fell 4.5% to 64 cents.

Restaurant Brands, which holds the local franchises for KFC, Pizza Hut and Starbucks, fell 2.7% to $1.44. Medical equipment distributor Ebos Group declined 1.7% to $5.85.

Synlait today said it won’t proceed with an IPO that would have raised funds to double milk powder production. On price, it has other options including tapping private investors or shareholders, according to the company’s statement today.

“It didn’t quite jump up to us,” said Paul Richardson, chief investment officer at BT Funds Management. ”There are other things competing for interest at the moment. There are a lot of people looking for money and a lot of appetite among our clients for highly rated debt.”

Kathmandu, the outdoor equipment retailer taken public by former owners Goldman Sachs JBWere and Quadrant Private Equity, was unchanged at $2.15. The chain store sold at IPO for $2.13.

DNZ Property Fund, which has a portfolio worth about $770 million is among other companies seeking to lure investors with a public float of as much as $140 million. The sale is fully underwritten by Goldman Sachs JBWere. Auckland International Airport’s five-year bonds carry a coupon of 8% and are rated A- at Standard & Poor’s.

AMP, the Australian retirement savings company, fell 1.6% to $7.92, tracking its shares on the ASX today.

Infratil rose 3.3% to $1.55, making it the biggest gainer on the NZX 50. New Zealand Refining rose 3.3% to $4.55, the second-largest gain.

Infratil, which has been selling non-core investments to raise funds and is in talks to buy Shell New Zealand’s assets including a chain of petrol stations, could end up a holder of NZR if Shell’s exit includes the holding in New Zealand’s only oil refiner.

Pike River Coal rose 2% to $1.01. The company said yesterday it expects agreement from a creditor group to amend the terms of a production target covenant. The company has had various production delays, while still managing to tunnel through a fault zone and repair a collapsed ventilation shaft. It needs to finance operations through until revenue from coal sales starts in next year.

Warehouse Group, the biggest retailer on the NZX, rose 1.7% to $4.12.

ING Property Trust rose 1.3% to 76 cents after reporting a $5.6 million first-half loss. The proceeds of the asset sales have helped it slash bank debt to $405 million from $532 million a year earlier.

“We expected ING to have some adjustments for the impact of valuations,” BT Funds’ Richardson said. “Having said that, it looks like they’re doing a better job with their balance sheet and the sector’s probably past the worst.”

Fisher & Paykel Healthcare declined 1.6% to $3.16 as the kiwi dollar rose. The manufacturer of breathing masks and ventilators gets almost 80% of its revenue in U.S. dollars. The New Zealand dollar was recently at 72.80 U.S. cents.

Rakon, which makes crystal oscillators for mobile phones and navigation systems, fell 0.9% to $1.17.

Businesswire.co.nz

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