Sharemarket tumbles early

Monday 20th December 2010

Shares in Michael Hill International (NZX: MHI ) rose in a tumbling early sharemarket, after the Hill family launched a partial takeover bid.

Durante Holdings, set up to consolidate the holdings of shares in MHI held by the Hill family through family trusts, is offering 90c per share to buy 5% of the shares it does not already own. That would see it buying 10m shares and take its holding to 50.2%.

Shortly after the New Zealand sharemarket opened for the week, MHI shares were up 2c to 87, while by 10.20am the benchmark NZX-50 index was down 25.44 points to 3299.68, wiping out much of its 31.3-point gain on Friday.

Contact Energy (NZX: CEN ) fell 7c to 617, Ebos Group (NZX: EBO ) was down 5c to 731, Trustpower (NZX: TPW ) lost 4c to 726, and Telecom (NZX: TEL ) lost 2c to 221.

Shares gaining early included Fletcher Building (NZX: FBU ) up 4c to 777, Hallenstein Glasson (NZX: HLG ) up 5c to 415, The Warehouse (NZX: WHS ) up 3c to 359, and NZ Refining Co (NZX: NZR ) up 3c to 445.

In the US, stocks ended flat on Friday (local time) as investors shrugged off encouraging economic signs and a tax-cut package expected to lift economic growth. Trading ended shortly before President Barack Obama signed a tax bill into law.

The $US850 billion package extends Bush-era tax cuts for another two years and expiring unemployment benefits through next year.

In a hopeful sign for the economy, the Conference Board said its index of leading economic indicators rose 1.1% in November, the fastest pace since March. The index - which tracks data such as orders for new goods and materials - rose 0.4% in October.

Stocks wavered in a tight range Friday, a day after major indexes hit two-year highs.

The Dow Jones industrial average fell 0.1% to close at 11,491.91, the broader S&P 500 eked out another 2010 high rising 0.1% to close at 1243.91, and the Nasdaq composite rose 0.2% to 2642.97.

NZPA

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