MARKET CLOSE: NZ stocks fall; NZS, NZR, PPL drop   1 Jul 2010

MARKET CLOSE: NZ stocks fall; Farming Systems, NZ Refining, Pumpkin Patch lead decline

By Jason Krupp

July 1 (BusinessWire) – New Zealand stocks fell, pushing the NZX 50 Index to a 12-month low, joining a global slide on reports that Moody’s Investors Service may cut Spain’s top credit rating and after weaker manufacturing growth in China. NZ Farming Systems Uruguay Ltd., New Zealand Refining Co. and Pumpkin Patch Ltd. paced the decline.

The NZX 50 fell 38.27 points, or 1.3%, to 2,933.8 in the first trading day of the third quarter, having slumped 9.5% in the previous three months. Within the index 36 stocks fell, three rose and 11 traded the same. Turnover was $36.3 million.

“The market is down again on concerns about the U.S. and the state of the recovery,” said Ricky Ward, domestic equities manager for Tyndall Investment Management Ltd. “It is also reporting season in Australia, and a number of companies look off their targets. Retail data in Australia is not as strong as it has been, and analysts are seriously re-questioning their expectations.”

Shares weakened on Wall Street, rounding out the worst quarter since the Lehman Brothers collapse, with the Standard & Poor’s 500 Index falling 12% in the second quarter.

Leading the local market lower, Farming Systems, the South American dairy operator, fell 7.1% to 39 cents. Share in children’s clothing retailer Pumpkin Patch fell 6.5% to $1.86.

New Zealand Refining, the nation’s only oil refinery operator, fell 6.8% to $2.90 after the price of crude oil extended its slide to US$75.69 a barrel from it May 4 peak of US$87.79.

Telecom Corp. fell 3.2% to $1.83 after the telecommunications company asked the government for an urgent respite from some of its operational separation undertakings to invest in wholesale broadband services. Communications Minister Steve Joyce had earlier announced that bidders for the government's $1.5 billion ultra-fast broadband fund would now be invited to supply plans for "lit" fibre, which would open up the way for more competition in the broadband market.

Pyne Gould Corp. was unchanged at 38 cents after the company’s Marac Finance unit agreed to buy GMAC New Zealand’s retail motor vehicle financing book for $70 million in cash to expand the reach of one of its core businesses. The purchase includes secured loan receivables, finance and operating leases. GMAC announced in 2008 that it planned to cease retail finance and transition out of its wholesale business.

Restaurant Brands, which operators the KFC, Pizza Hut and Starbucks outlets in New Zealand, led gains on the NZX 50, rising 3.5% to $2.38, a 13-year high after boosting its forecast annual profit. The company expects to post a net profit, excluding non-trading items, of between $24 million and $26 million this year.

ING Medical Properties Trust, the health sector investment company, rose 0.8% to $1.22, while shares in Hallenstein Glasson Holdings, the clothing retailer, rose 0.3% to $3.71.

DNZ Property Fund Ltd. halted trading in its shares on the Unlisted exchange as it gears up for next week’s vote to sell shares that would trade on the NZX. Shareholders in the property investor will vote next week on whether to accept a $35 million pro rata offer, followed by a bookbuild for new investors, as it tries for a second time to win approval to list on the NZX.

Irongate Property Ltd., one of the units of the St Laurence group that escaped receivership, failed to meet the deadline to file its annual report and risks having its $28.9 million of NZX-listed bonds suspended.

The property manager, which also has shares that trade on the Unlisted platform, was required to file its latest accounts by the end of trading yesterday. It now has until July 7 to lodge its accounts for the year ended March 31 or face suspension the following day.

(BusinessDesk)

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