MARKET CLOSE: NZ shares mixed; FPA falls, Rakon up

MARKET CLOSE: NZ shares mixed, FPA, Sky City fall, Rakon gains

June 26 – New Zealand shares were mixed after figures showed the economy sank deeper into recession in the first quarter and as investors await second-quarter earnings. Fisher & Paykel Appliances, Ryman Healthcare and Sky City Entertainment Group led decliners.

The NZX 50 index edged down 0.03% to 2770.61. Within the index, 28 stocks rose, eight fell and 14 were unchanged. Turnover was NZ$86.9 million.

F&P Appliances fell 2.9% to 66 cents, after raising NZ$142.9 million through a rights issue which closed yesterday, with a shortfall of 4.9% on the offer. Ryman slipped 2.5% to NZ$1.56. Navigation system components maker Rakon Ltd. led local gainers, climbing 4.9% to NZ$1.50.

New Zealand’s economy shrank 1% in the first quarter and a revised 1% in the fourth quarter of 2008, reflecting weaker household spending and a slump in manufacturing. Investors are now focused on the second quarter. “Since the end of March the world has maybe stabilized,” said Andrew Michl, who helps manage $4 billion in New Zealand cash and fixed interest at ING New Zealand.

Telecom Corp., the biggest company on the NZX 50, slipped 0.8% to NZ$2.65.

Still, corporate profits probably haven’t recovered much, said Paul Harrison, equities manager at BT Funds Management. “There are two different types of company in New Zealand at the moment – those experiencing flattish demand and others doing it tough.”

PGG Wrightson this week said profit dropped as much as 23% in the year ending June 30, reflecting a slide in spending by dairy, sheep and beef farmers. The shares rose 4.4% to NZ$1.18 today and is down 12% this year.

“We’re in a hiatus waiting for the June reporting,” Harrison said. “Companies have very little visibility going forward. Their order books have become very short.”

Fletcher Building rose 0.2% to NZ$6.40 after the company announced its Laminex unit will shutter a medium density fibreboard plant in Western Australia because of a downturn in demand.

Sky City slid 2.2% to NZ$2.68. Harrison said the nation’s biggest casino operators has “quite a few loose holders” of stock after raising NZ$185 million in a share sale earlier this year, even though its balance sheet wasn’t under pressure.

APN News & Media, publisher of the New Zealand Herald, rose 6.9% to NZ$1.87, leading the index higher.

Pike River Coal rose 4.4% to NZ$1.50 as commodity prices jumped. The mining company which has yet to produce any coal is rated ‘outperform’ based on the consensus of analysts polled by Reuters. Earnings will swing to a NZ$38 million profit in 2010, as coal comes on stream, according to Reuters data.

New Zealand Oil & Gas rose 2.6% to NZ$1.59 as crude oil gained for a second day, reaching US$70.66 a barrel in Singapore.
Medical supplies distributor EBOS Group Ltd. rose 2.9% to NZ$5.25 and Guinness Peat Group gained 2.9% to 70 cents.

(BusinessWire)