MARKET CLOSE: NZ stocks fall after U.S. put on negative rating watch; PPL leads decliners, ARG rises

By Jason Krupp

July 15 (BusinessDesk) - New Zealand stocks fell for a ninth session, after a warning by Standard & Poor's that there was a one-in-two chance the U.S. could have its AAA credit rating cut, sapping investors' appetite for higher yielding, or riskier, assets. Pumpkin Patch Ltd. led decliners, while Argosy Property Trust rose.

The NZX 50 Index fell 3.17 points, or 0.1%, to 3,406.38, and declined 1.4% on the week. Within the index, 25 stocks fell, 17 rose, and eight were unchanged. Turnover was $129.7 million.

The ratings agency's decision to place the world's biggest economy on negative watch comes as Democrats and Republicans disagree over lifting the U.S. government debt ceiling, a condition of preserving the credit rating.

In afternoon trade, Hong Kong's Hang Seng Index fell 0.3% to 21,883.89, Singapore's Straits Times Index fell 0.1% to 3,086.84, and Australia's S&P/ASX 200 Index fell 0.6% to 4,462.80.

"We're seeing some nervousness in the market as we're heading into the weekend on the back the S&P announcement," said Rickey Ward, domestic equities manager at Tyndall Investment Management.

Retail stocks took the brunt of the selling on the day, after the ANZ-Roy Morgan Consumer Confidence survey showed shoppers kept a tight grip on their purses in July, with spending caution outstripping the urge to splurge seen in the previous month.

Pumpkin Patch Ltd., the children's clothing chain, fell 2.8% to $1.04. Kathmandu Holdings, the outdoor clothing retailer, fell 2.7% to $2.15. Warehouse group, the country's biggest listed retailer, fell 2.3% to $3.46.

NZX Ltd. fell 2.1% to $2.30 after the Financial Markets Authority said it is taking an interest in the security market operator's disclosures over the performance of the Clear grain exchange.

The announcement came after testimony by NZX chief executive Mark Weldon given in a court hearing with Clear’s founders painted a weaker picture of the business than had earlier been reported to the market.

Fletcher Building Ltd., the country's biggest construction firm, fell 1% to $8.05, a five-month low.

"People are concerned about the soft patch in the housing market in Australia and the delayed rebuild in Christchurch," Ward said. "It's something the market has been aware of for a while, but in conjunction with the with stronger New Zealand dollar, that's put pressure on the stock today."

Argosy Property Trust, the listed property investment vehicle, rose 2.4% to 84 cents. The trust announced today that independent directors, Trevor Scott and Peter Brook, have reached an agreement with OnePath New Zealand Ltd. to buy out the its management contract for $20 million.

That's 38% lower from the $32.5 million originally sought, and comes as DNZ
Property Fund Ltd. takes the manager to court for not convening a meeting where a group of unitholders planned to call for OnePath to be dumped without payment.

Vital Healthcare Property Trust, Argosy's sister fund, rose 0.9% to $1.18 after OnePath said it's likely to agree to a similar cut in fees for the specialist medical clinic property investor. OnePath had originally sought a payment of $14 million to exit the contract.

AMP Ltd., the Australian wealth manager, rose 2.2% to $5.98, snapping a one week slide seen as investors sold down their financial sector holdings amid fears the global economic recovery is rapidly losing momentum.

Contact Energy Ltd., the country's biggest electricity company, rose 0.8% to $5.39. The company today announced that development and acquisitions general manager Liz Kelly will leave the company after 11 years in various senior roles.

Telecom Corp., the country's biggest phone company, rose 0.8% to $2.46.

The company's Chorus unit today released the draft terms of its fibre products to meet requirements under the Chorus Wholesale Services Agreement as part of the industry consultation process for the government’s $1.35 billion ultrafast broadband plan.

(BusinessDesk)

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