MARKET CLOSE: NZ stocks out-perform region as Europe, US gloom weighs on markets

By Jason Krupp

July 12 (BusinessDesk) - New Zealand stocks fell for a sixth session, though they missed the worst of the sell-off in regional markets as European debt fears and the protracted U.S. negotiations on the debt ceiling saw investors shun higher-yielding, or riskier, assets. Goodman Fielder Ltd. led decliners, while Telecom Corp. rose.

The NZX 50 Index fell 3.75 points, or 0.1%, to 3,430.37. Within the index, 25 stocks fell, 10 rose, and 15 were unchanged. Turnover was $138.7 million.

Across the Asia Pacific region markets were trading in negative territory today, led by South Korea with the KOSPI Index recently trading 2.1% down at 2,112.47, followed by Hong Kong's Hang Seng, down 2% to 21903.18, and Australia's S&P/ASX 200, down 1.7% to 4,502.3.

"If you look across the region we are the standout performer, even though we're down," said Andrew Kelleher at ASB Securities. "You get the big ripples where the action is, and we're really just a bystander at these global events which explains why we've seen less volatility on the day."

Goodman Fielder, the Australian food ingredient manufacturer, fell 3.8% to $1.28. The stock is rated as 'hold' according to a consensus poll of 12 analysts compiled by Reuters.

Vector Ltd., the Auckland electricity and gas distributor, fell 2.3% to $2.51.

Financial stocks took another beating on the exchange today, with many of the dual listed stocks bearing the effects of the sell down on the Australian market.

AMP Ltd., the wealth manager which recently acquired the Australian and New Zealand assets of Axa Asia Pacific Holdings, fell 2.2% $6.11.

Westpac Banking Corp., the Australian lender, fell 1.7% to $27.33.

Australia & New Zealand Banking Group, the country's biggest lender, fell 1.5% to $27.29.

Air New Zealand Ltd., the national carrier, fell 1.7% to $1.15 amid reports that Australian airlines will be forced to raise their airfares in response to the recently introduced carbon tax. The kiwi airline owns a 15% stake in trans-Tasman alliance partner Virgin Blue Holdings.

Infratil Ltd. was unchanged at $1.80 after H.R.L. Morrison & Co., the Wellington-based investment bank that manages the company, increased its stake in the diversified utility group to 12% as the largest shareholder sells down its holding.

Utilico Investments Ltd., a U.K investor that had counted Infratil as its biggest holding, has sold 15 million shares at $1.85 apiece, or a total $27.8 million, to Morrison. The transaction requires shareholder approval at their annual meeting on August 15.

Telecom Corp., the country's biggest phone company, rose 2% to $2.50, leading gainers on the exchange.

Rakon Ltd., the manufacturer of crystal oscillators used in GPS units and cellphones, rose 1% to 98 cents after it officially opened its US$35 million factory in Chengdu in western China on time.

The factory is a joint venture with leading quartz blank company Timemaker which holds 15% of the enterprise.

Diligent Board Member Services Inc., the start-up software company, rose 4.2% to $1.25 ahead of it reporting second quarter sales tomorrow.

The shares showed a similar flurry upwards ahead of its first quarter sales report in mid-April and continued rallying as high as $1.30 ahead of the first quarter profit announcement but then drifted down to $1.01.

The stock was the best performer on the NZX last year, surging 152%, and it has climbed almost 74% since the start of 2011.

Fletcher Building Ltd., the country's biggest construction firm, rose 0.2% to $8.26 after it said it was considering suing the Australian government for axing a household insulation programme last year.

The cancellation of the scheme has left the company with an $18 million stockpile of Pink Batts insulation material.

Guinness Peat Group, the investment holding company which recently cancelled 227.9 million of its shares in exchange for payment of 35.07 pence apiece, rose 2% to 77 cents.

Heartland New Zealand Ltd., the would-be bank, rose 1.5% to 67 cents after the company today published a memorandum as part of its $100 million bid to buy PGG Wrightson Ltd.'s finance unit.

Shares in Wrightson, the rural services firm, were unchanged at 48 cents.

(BusinessDesk)

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