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MARKET CLOSE: NZ shares mixed; Hallenstein nervous on sales

MARKET CLOSE: NZ shares mixed; Hallenstein flags sales struggle, Chorus climbs from lows

Dec. 12 (BusinessDesk) – New Zealand shares were mixed as network operator Chorus extended its rebound from a record low and clothing chain Hallenstein Glasson Holdings said it may have to cut guidance.

The NZX 50 rose 3.894 points, or 0.1 percent, to 4708.198. Within the index, 16 stocks rose, 23 fell and 11 were unchanged. Turnover was $168 million.

Chorus rose 3 percent to $1.37, its third straight gain, having touched a record-low close of $1.305 on Dec. 9 amid concern about the impact of regulated price cuts on its copper network. Contact Energy rose 1.4 percent to $5, having been among power companies hurt by the threat of regulatory change after next year’s elections.

“The aggressive selling pressure in the utilities sector and in Chorus has abated, at least for now,” said Anthony Halls, portfolio manager for equities at Mint Asset Management. Uncertainties remain and “you can’t put a price target on the stock and have confidence in it.”

Equity markets weakened across Asia as investors speculated the US economy is growing at a fast enough clip to prompt the Federal Reserve to wind back its US$85 billion a month of bond-buying stimulus. In New Zealand, the central bank today flagged the end of record low interest rates in the face of “considerable momentum” in the economy and the emergence of inflationary pressures.

The local market “is starting to build in some tightening,” Halls said. The Reserve Bank is “getting more certain in the language they are using.”

Hallenstein fell 5.1 percent to $3.70 after saying it needed a successful summer season to meet earnings guidance.

“We are now at the ‘business end’ of the season and the success or otherwise of the next few weeks will have a significant influence on our first half profit,” chairman Warren Bell told shareholders at their annual meeting. “Our forecast of a 20 percent decline in profits will come under pressure if sales do not improve to above last year’s level over the balance of the summer season.”

Diligent Board Member Services, which has delayed release of its first half results and is restating three years of sales fell 6.1 percent to $3.55, the biggest percentage drop on the index.

Westpac Banking Corp fell 3.2 percent to $33.10, AMP dropped 2.4 percent to $4.55 and Australia & New Zealand Banking Group fell 2.3 percent to $33.05 reflecting a slide in Australia’s S&P/ASX 200 Index.

Windflow Technology, the wind turbine manufacturer, tumbled 40 percent to 6 cents after the company said it may tap shareholders for $4 million as it chases sales in the UK and develops a new product.

Fonterra Shareholders’ Fund fell 1.9 percent to $5.64, having tumbled yesterday when Fonterra, the world’s largest dairy exporter, slashed its dividend and earnings forecasts.

Trade Me fell 0.7 percent to $4.19. The auction website today said it had agreed to acquire the MotorWeb site for $19.5 million to expand its motor vehicle offering.

Vector declined about 2 percent to $2.50 after leading a failed attempt to overturn the way the Commerce Commission sets prices for its services, following a merits review challenge to the High Court.

Fletcher Building fell 0.7 percent to $8.73 and Telecom rose 1.3 percent to $2.315.

(BusinessDesk)

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