MARKET CLOSE: NZ shares fall; Steel & Tube extends slide, Freightways slips

Feb. 13 (BusinessDesk) – New Zealand shares fell, led by Steel & Tube Holdings, which posted a profit drop last week and is one of the first companies to report in earnings season. Freightways ended the day lower after posting earnings that met estimates.

The NZX 50 Index fell 8.1 points, or 0.2 percent, from a three-month high to 3340.02. Within the index, 23 stocks fell, 16 rose and 11 were unchanged. Turnover was $85 million, the lowest in the past four trading days.

Steel & Tube declined 4.2 percent to $2.06, the lowest since Dec. 21. The seller of steel building products last week posted a 24 percent drop in first-half profit, meeting its guidance, and said it sees little pick-up in the second half.

New Zealand’s earnings season kicks off in earnest this week though brokers don’t expect many fireworks. Forsyth Barr is predicting aggregate sales growth of about 11 percent across 46 companies previewed, while net profit would shrink 0.3 percent.

Freightways, the courier and data storage company, fell 0.5 percent to $3.76 after posting a 20 percent drop in profit and raising its dividend. Net income was and revenue climbed 9 percent to $192 million. The stock has climbed 17 percent in the past year, reaching a four-year high of $3.86 last week.

“The result was in line with expectations - the market would have been pleased," said James Lee, head of institutional equities at First NZ Capital.

Mainfreight, the biggest trucking firm on the bourse, rose 1.5 percent to $10.35, the highest close since early December. The company is scheduled to release its third-quarter results tomorrow and First NZ Capital expects a 64 percent jump in reported profit to $29.8 million.

Mainfreight "will show a similar trend (to Freightways) - they typically haven't under delivered," Lee said.

Argosy Property Trust fell 0.6 percent to 84 cents after announcing it sold four properties in Porirua for $16.2 million, or 106 percent of their combined book value, while a Palmerston North property went for an undisclosed value at book value.

Allied Farmers jumped 20 percent to 4.8 cents after the Inland Revenue Department said some investors in the failed Hanover and United finance companies who accepted shares of Allied in a debt-for-equity swap may be entitled to deduct any losses incurred when they sold their holdings.

Fletcher Building, the biggest company on the exchange, declined 0.2 percent to $6.72 and Telecom, which spun off its Chorus networks business last year, fell 0.5 percent to $2.135.

(BusinessDesk)

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