MARKET CLOSE: NZ shares rise; Telecom up after cabinet ruling, Air NZ down 4%

Thursday 18th June 2009

New Zealand shares rose for the first day in three, led by Telecom after the regulator imposed pricing rules for rivals to access the phone company’s roadside cabinets. The NZX 50 Index gained while most benchmarks across Asia fell on concern a stuttering U.S. economy will choke off export demand worldwide.

The NZX 50 rose 20.20, or 0.7%, to 2798.24, the biggest gain since June 3. Within the index, 27 stocks fell, 16 rose and seven were unchanged. Turnover was $132 million, making it one of the biggest days this year. Some 7 million Fletcher Building shares changed hands, pushing the stock up 1.4% to $6.45. Telecom climbed 3.9% to $2.69, with 11 million shares traded.

The phone company, which is rolling out its high-speed mobile XT network, got word today of the charges it can levy competitors for access to the sub-loop unbundled copper service. The Commerce Commission set the monthly rental charge to use Telecom’s copper network that connects broadband consumers to a local distribution cabinet at $11.99 per line in urban areas and $22.14 per line in non-urban areas, the same level set in its draft determination. Rivals including Orcon Internet have complained prices are too high.

PGG Wrightson(NZX: PGW ), the nation’s biggest rural services company, rose 3.9% to $1.32, leading the NZX 50 higher after advisers to a select committee on emissions trading recommended that farming be excluded for now from an ETS scheme. Forests stay in though reporting on forestry has been delayed.

Goodman Property Trust (NZX: GMT ) rose 2.3% to 88 cents.

Air New Zealand (NZX: AIR ) slipped 4.1% to 94 cents, the lowest since April 8 and the second daily decline since the carrier said long-haul passenger volumes continued to slide in May, led by a 19% decline in numbers on routes through Asia, Japan and the UK, reflecting the global economic slump and fears about swine flu.

APN News & Media (NZX: APN ), publisher of the NZ Herald, fell 4% to $1.90, and has declined 33% this year.

Tourism Holdings (NZX: THL ) climbed 2.2% to 46 cents after the company responded to a query from the Shareholders Association by saying it was in compliance with its banking covenants. Vector (NZX: VCT ) made a similar statement. Its shares fell 1% to $2.01.

The New Zealand dollar edged up to 63.38 U.S. cents, little changed from yesterday, when Reserve Bank Governor Alan Bollard warned that there were risks inherent in the nation’s recovery.

Bank of New Zealand chief economist Tony Alexander said he expects the economy will resume growing before the end of the year, partly helped by exports of such as sheepmeat, venison and gold kiwifruit.

Still, the domestic economy may make the biggest contribution, with retailing and housing fueled by cheaper credit and easier fiscal policy – indicating the economy isn’t rebalancing away from consumers to exports and investments as desired by the central bank.

Meat exporter AFFCO Holdings (NZX: AFF ) fell 9.1% to 40 cents.

Businesswire.co.nz

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