CLOSE: NZX 50 tumbles; Freightways declines, FPA falls on Bongard

Monday 17th August 2009

New Zealand’s benchmark NZX 50 Index tumbled, led by Freightways Ltd. after the courier firm pointed to a tough short-term outlook and as Fisher & Paykel Appliances' long-serving managing director John Bongard announced his resignation due to illness.

The NZX 50 fell 65.17, or 2.1%, to 3086.08. Within the index, 32 stocks fell, eight rose and nine were unchanged. Turnover was a below-average $57 million.

Freightways (NZX: FRE ) tumbled 8.8% to $3.10 after announcing a drop in its dividend payment and weaker trading. The courier company will raise more capital via a dividend reinvestment plan that’s underwritten by Forsyth Barr.

“Freightways is a reasonable barometer of what’s happening in the economy,” said Stephen Walker, head of asset management at Goldman Sachs JBWere. “The immediate outlook is for weaker trading.”

F&P Appliances (NZX: FPA ) fell 5.9% to 80 cents after managing director Bongard announced his resignation at the manufacturer’s annual meeting. He has been battling prostate cancer for over a year, he told shareholders, according to BusinessDay.

The fridge and oven manufacturer was forced to sell shares at a deep discount this year and allowed China’s Haier to take a 20% stake under arrangements to preserve the company and avoid its creditors taking control.

Nuplex Industries (NZX: NPX ) dropped 7.9% to $2.21. Goldman Sachs JBWere’s Walker said the shares “ran too far and there was not any supply.”Shares of the specialty chemicals maker soared 26% this month, up until Friday, when they reached $2.40.

Fletcher Building (NZX: FBU ) slipped 4.3% to $7.64. It peaked at $7.98 on Friday, the highest in more than a year and had advanced 11% so far in August.

“The economy is just past its bottom in New Zealand but it’s going to be a while before it shows up in company earnings,” Walker said. “Results this season are going to be pretty ordinary and the outlook for the next six months will depend on what sort of business it is – leading or a laggard,” he said. Fletcher Building, in the building industry, might take a while “to feel the pick-up.”

Infratil (NZX: IFT ), the diversified investment group, edged down 0.6% to $1.81, outperforming the benchmark index.

Operating profit will be at the low end of its forecast range this year as earnings from its European Airports unit and Australian energy business undershoot expectations, chief executive Marko Bogoievski told shareholders at their annual meeting.

Stocks tumbled throughout Asia after a report on Friday showed U.S. consumer confidence unexpectedly dropped this month and data from Japan today showed the world’s second-largest economy grew at an annual 3.7% pace in the second quarter, less than forecast. The first growth in five quarters may run out of steam when governments worldwide complete their stimulus measures, investors said.

The Nikkei 225 Index dropped 3.1% to 10268.61 in early afternoon trading while Hon Kong’s Hang Seng fell 2.6% to 20340.85. Australia’s S&P/ASX 200 fell 1.5% to 4393.60.

In New Zealand, the NZSE Consumer Index declined 1.2% as retailers mostly weakened.

Michael Hill International (NZX: MHI ), which owns a chain of stores in the U.S., fell 4.2% to 68 cents. Children’s clothing chain Pumpkin Patch (NZX: PPL ) dropped 2.1% to $1.86 and Warehouse Group (NZX: WHS ), the biggest retailer on the exchange, fell 1.2% to $4.05.

Skellerup Holdings (NZX: SKU ) rose 3.6% to 57 cents, the biggest advance on the NZX 50 today. Air New Zealand (NZX: AIR ) rose 3.2% to $1.29 and NZ Farming Systems Uruguay (NZX: NZS ) gained 2.1% to 48 cents.

ING Property Trust (NZX: ING ) rose 1.4% to 74 cents. On Friday it announced the sale of three properties for a total $10.4 million, bringing sales of non-core assets since March to $48.9 million as it repays debt.

Businesswire.co.nz

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