MARKET CLOSE: NZ stocks fall as Telecom slips down broadband contender list

By Jason Krupp

Sept. 9 (BusinessDesk) – New Zealand shares fell for a second straight day, after Crown Fibre Holdings prioritised three regional deals in its short list for the government funded roll-out of an ultra-fast broadband network, dousing hopes for a Telecom Corp.-led national approach.

The NZX 50 fell 9.4 points, or 3%, to 3,161.7. Within the index nine stocks fell, 28 rose and 13 were unchanged. Turnover on the day was $90.9 million.

Crown said Telecom still remains one of 14 companies being considered for future negotiations on the $1.8 billion “fibre-to-the-home” initiative and would continue in a partner selection process. Shares fell 5.2% to $2.02.
Vector Ltd., the lead partner in the Regional Fibre Group which also put forward a wide-ranging proposal, was unchanged at $2.08

“I think the reaction today has been a bit kneejerk, but you also have to consider that the $2.12 level had the Telecom-centric model built into it,” said Paul Harrison, equity portfolio manager for BT Funds Management. “If they are not involved in the broadband initiative, the only thing it can do is compete, and how it fares from there is down to how it competes with line providers and the margins.”

Guinness Peat Group, the U.K.-based investment company, fell 1.6% to 61 cents, Air New Zealand Ltd., the national carrier, fell 1.6% to $1.26 and Kiwi Income Property Trust, the commercial property investor, fell 1% to 98 cents.

Shares in Fisher & Paykel Healthcare, which makes respirators and breathing masks for the North American market, fell 0.6% to $3 on softer manufacturing data.

Statistics N.Z. figures released today show manufacturing volumes fell 1.8% during the June quarter, the third consecutive decrease, and the lowest sales volumes since Sept. quarter of 1999.

Windflow Technology Ltd., which makes turbines for windfarms, fell 4.4% to $1.10 after the company revised up its loss for the year ended June 30 to $7.95 million because of costs of remedial work for customer NZ Windfarms.

The manufacturer previously estimated the loss at $5 million to $6 million. The increased loss "arises from additional provisions WTL has recorded in respect of the full costs of remedial work arising from the agreement reached with NZ Windfarms."

AMP Ltd., the wealth manager, fell 0.9% to $6.35 amid news the Australian Competition and Consumer Commission knocked back National Australia Bank’s revised bid to takeover Axa Asia Pacific’s Australasian businesses. AMP’s bid for the assets was trumped by NAB, though the wealth manager has already secured regulatory approval for a deal to go through.
On the ASX, shares of NAB rose 3.7% to A$24.84.

Fletcher Building Ltd., New Zealand’s largest listed company, rose 0.7% to $8.22 on news that the value of New Zealand’s total building work hit an 18-month high in the June quarter as the construction sector bounced back from a slump. Data from Statistics New Zealand shows that while the sector is noticeably up on its low in September last year, it is still 18% below a peak in December 2007.

Steel & Tube Holdings, the market of steel reinforcing, rose 1.7% to $2.46.
Both companies are expected to benefit from the rebuilding efforts after the Canterbury earthquake, which the Treasury has estimated is likely to cost in the region of $4 billion.

Cavalier Corp., New Zealand’s only listed carpet maker, rose 5.7% to $2.80, pacing gains on the NZX 50. Telstra Corp., the Australian telephone company, rose 3.3% $ 3.75, and energy exploration and production Company NZ Oil & Gas Ltd. rose 2.3% to $1.31.

Talley’s Group continued its buy-up of Affco Holdings, lifting its stake in the meat processor to 80.2% as it seeks to take over the company. The shares were unchanged at the offer price of 37 cents.

(BusinessDesk)