NZX CLOSE: NZ shares edge lower; PGW falls after stock issue, Allied slumps

Monday 21st December 2009

New Zealand shares edged lower, as data showing a drop in tourist numbers weighed on Air New Zealand and Tourism Holdings, and PGG Wrightson sank after the completion of its rights issue.

The NZX 50 Index fell 4.42, or 0.1%, to 3149.80. Within the index, 21 stocks fell, 15 rose and 13 were unchanged. Turnover was $61 million.

Wrightson, the nation’s biggest rural services company, fell 6.1% to 62 cents. On Friday, chairman Keith Smith said shareholders had taken up 382 million shares, a take-up of about 95%, leaving 19.5 million shares to be taken up by the underwriters.

Air New Zealand, the national carrier, fell 1.7% to $1.19 as government figures showed short-term visitors to New Zealand fell a seasonally adjusted 3.7% last month. Tourism Holdings, the campervan rental company, fell 6.3% to 75 cents.

“Tourist numbers have been remarkably resilient over the winter months in the face of the global recession, largely thanks to the Australian market,” said Robin Clements, economist at UBS New Zealand. “But it remains to be seen whether the coming peak tourist months can demonstrate similar resilience.”

Allied Finance sank 32% to a new record low 10 cents after announcing it had issued 1.9 billion shares to former investors in Hanover Finance and United Finance at 20.7 cents apiece. The company previously had just 37.7 million shares on issue and some investors have speculated there will be heavy selling once the share distribution is complete.

Some 8.69 million shares changed hands today, the heaviest ever trading day, amounting to about a fifth of its existing shares on issue.

Telecom Corp. fell 2% to $2.44 and children’s clothing chain Pumpkin Patch slipped 2.4% to $2.

Fisher & Paykel Appliances rose 5.1% to 62 cents. Chairman Ralph Waters reiterated the company’s profit guidance for a normalized profit of $16 million to $23 million in the 12 months ended March 31. Impairments on its North American business mean the net loss will be $58 million to $65 million, Waters said in the company’s first-half report.

Cynotech Holdings, a finance, satellite and manufacturing group, tumbled 17% to 9 cents after Cynotech Securities, a company associated with major shareholder Allan Hawkins, on Friday made an offer to acquire the company in exchange for preference shares in Cynotech Securities that pay 8% annual interest. Each CSGL preference share has an attributed value of 13.5 cents, the company said.

Comvita Ltd, which develops products based on the medicinal properties of honey, rose 5.5% to $1.35 after announcing it has concluded a global licensing deal for its Medihoney products with Princeton-based Derma Sciences Inc. for US$4.25 million in cash and stock, and ongoing royalties.

“We have a great of confidence in Derma’s ability to exploit the considerable opportunity for Medihoney in the professional market,” said Comvita chairman Neil Craig.

Businesswire.co.nz

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