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MARKET CLOSE: Warehouse, Hallenstein lead fall on weak mood

MARKET CLOSE: Warehouse, Hallenstein lead fall on weak consumer numbers

by Jason Krupp

Dec. 16 (BusinessDesk) - New Zealand stocks fell, led lower by Warehouse Group and Hallenstein Glasson Holdings after weakening consumer confidence figures cast a pall on the key Christmas retail period.

The NZX 50 Index fell 4.14 points, or 0.12%, to 3,293.77. Within the index, 23 stocks declined, 15 gained and 12 were unchanged.

Turnover was $107.7 million.Warehouse, New Zealand's biggest listed retailer, fell 2.5% to $3.52, and Hallenstein fell 2.4% to $4.07 after the Westpac McDermott Miller Consumer Confidence Index fell 5.8 points to 108.3, based on the survey conducted between Dec. 1 and Dec. 14.

For a second year, the December quarter survey quizzed kiwis on their Christmas gift spending intentions, and the results showed the median consumer plans to spend a net 36% less on presents than they did last year, at a total of $413.

Consumers "are entering this Christmas season with a cynical view, and all surveys and data reflect that the economy has been very unsettled," said Rickey Ward, equities manager at Tyndall Investment Management.

Sentiment was further dampened by a decline in business confidence this month as the stalling economic recovery makes companies more cautious about committing to new activity.

The National Bank Business Outlook survey found that a net 29.5% of respondents are expecting better times ahead this month, down from a net 33.2% in November, while expectations for their own activity slipped to a net positive 34.5% this month, from 35.3% previously.

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Nuplex Industries Ltd., the industrial chemical and resin manufacturer, fell 3.4% to $3.40, pacing decliners on the exchange.

Rakon Ltd., the manufacturer of crystal oscillators used in cellphones and GPS units, fell 2.5% to $1.15, and Goodman Fielder Ltd., the food ingredient maker, fell 2.2% to $1.80.

Fletcher Building Ltd., the country's biggest construction company fell 0.4% to $7.72 following its hostile A$870 million bid for Australia’s Crane Group Ltd. "There are an enormous amount of question marks as to why they approached Crane in the way they have," Ward said.

Contact Energy Ltd., the country's third biggest listed company, fell 0.1% to $6.19 after the government gave final required approvals for its Ahuroa underground gas storage facility at Stratford to go into operation, the first such facility in New Zealand.

The development will restore ing portfolio flexibility lost two years ago with the failure of all but one pole of the Cook Strait cable.

Pyne Gould Corp., the financial services company, was unchanged at 37 cents after the $2.2 billion merger between its Marac Finance unit and Canterbury and Southern Cross Building Societies became a reality today, with the High Court granting final orders for the deal.

Building Society Holdings Ltd., the registered name of the so-called “Heartland” bank, is expected to be launched in early January followed by a listing on the NZX in February.New Zealand Oil & Gas Ltd., the energy exploration company which owns 29% of Pike River Coal Ltd., rose 4.9% to 86 cents, pacing gainers on the bourse and clawing back some of the value it lost since Pike was placed in receivership.

"It's an emotionally driven investment at the moment," Ward said. "When you factor out Pike and write off the debt and look at market expectations, the price not too dissimilar to the current level which suggests where the level of support is."

Air New Zealand Ltd., the national carrier, rose 1.4% to $1.45 in the wake of the Australian antitrust regulator's decision to approve its alliance with Virgin Blue on the highly competitive trans-Tasman route.

The airlines won the regulator and several business groups over by agreeing to code-share on the route, connect domestic flights and offer reciprocal frequent flyer and lounge access agreements.

Allied Farmers Ltd., which took over the Hanover Finance Ltd. loan book in a failed bid to become a major lender, rose 10% to 2.2 cents.

Hanover today served papers against the company over its refusal to pay $5 million as part of the companies’ debt-for-equity swap.

Allied insists it was entitled to cancel the payment, claiming Hanover breached the terms of their agreement in some of the last transactions before the swap.

Skellerup Holdings, the rubber goods and milking equipment manufacturer, rose 7.6 to $1.13; SkyCity Entertainment Group, the casino and hotel operator, rose 1.3% to $3.23, and Sanford Ltd., the fisheries group, rose 0.7% to $4.53.

(BusinessDesk) 18:05:57

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