MARKET CLOSE: NZ shares mixed; Goodman Fielder, THL falls

Sunday 18th January 2009

New Zealand shares were mixed as foodmaker Goodman Fielder led the NZX 50 Index higher while Rakon and Tourism Holdings declined.

The NZX 50 rose 9.325, or 0.3%, to 2752.16. Within the index, 16 stocks rose, 18 stocks declined and 16 stocks were unchanged. Turnover surged to about NZ$103 million from less than NZ$50 million yesterday.

Trade was boosted by some 18.96 million shares of Telecom changing hands, about 1% of the company. The stock was unchanged at NZ$2.35 and is down 42% in the past 12 months. Telecom and rival Vodafone have offered to cut fees charged for routing call traffic to mobile customers in an effort to placate the Commerce Commission, which is considering regulating the market.

Goodman Fielder rose 5.1% to NZ$1.84. Auckland International Airport rose 4.7% to NZ$1.79 and has gained 4.7% since Dec. 12, when Macquarie Equities raised its rating on the stock to 'outperform,' saying its price now fully reflects the company's challenging operating environment.

Tourism Holdings, New Zealand's biggest campervan operator, fell 4.2% to 68 cents after Tourism New Zealand said the industry expects a downturn this year because of the global economic slump. Inbound tourism could fall by 45,000 this year amid the global recession, according to Shamubeel Eaqub, economist at Goldman Sachs JBWere.

Rakon, which makes components for navigation systems, fell about 5% to NZ$1.15. Rbos Group, which distributes medical supplies, rose 2.4% to NZ$4.35.

Economists have been revising up their predictions for the central bank's rate cut this month amid further signs of a broad-based downturn in the economy and expectations that inflation is abating as fuel prices fall.

"After last week's shocking business survey, we were compelled to lift the bar in terms of the likely size of rate cut at the RBNZ's next review," said Robin Clements, chief economist at UBS New Zealand. He now predicts a 100 basis point cut to 4%, in line with forecasts by Westpac and Goldman Sachs JBWere.

In Sydney, the S&P/ASX 200 Index rose 0.6% to 3550.9. Miners BHP Billiton and Rio Tinto rose as metal prices edged up in volatile trading. BHP was up 3.2% to A$29.81 and Rio rose 3.1% to A$34.36.

The Nikkei 225 Index rose 2.4% to 8239.66 in early afternoon trading as the yen weakened, lifting prospects for exporters. Honda Motor rose 7.1%.

(Businesswire.co.nz)

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