Tower share price fall queried by NZSE

By NZPA

Wednesday 11th September 2002

The New Zealand Stock Exchange has queried financial services group Tower after a 10 percent fall in its share price in the last 10 days.

Tower said it had no explanation in response to the NZSE, which asked if the company knew why its shares fell 40 cents per share to $3.50 yesterday.

Since closing yesterday at $3.59, Tower shares gained ground today to close up 17c at $3.76 by late afternoon.

"Tower is not in possession of information which if generally available to the public might reasonably be regarded as an explanation of the price variation," the company said in a statement.

However, it noted its average sharemarket turnover between September 2 and yesterday was low, and it was trying to reduce the number of small shareholders. More than one million shares have been sold under the small shareholder programme since August 28.

A third factor was market sentiment. "Tower's share price (as with many other insurance/financial services listed companies) has been affected by the general downturn of the insurance/financial services sector and adverse investment markets."

Tower shares have lost considerable ground since February when they were trading at $5.30.

That slide accelerated since the $A900 million ($NZ1.06 billion) acquisition last month of BT Financial Group by Australia's Westpac Banking, which Tower admitted would intensify competition and raise questions about its own future.

The purchase created Australia's fourth biggest retail fund manager with more than $A30 billion under management, compared with Tower's $NZ21.9 billion.

Tower, which listed in 1999, posted a net after-tax profit of $40.7 million for the half year to March 31.

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