MARKET CLOSE: NZ stocks fall; Telstra leads decliners

MARKET CLOSE: NZ stocks fall; Telstra leads decliners, Kathmandu gains

By Jason Krupp

June 24 (BusinessDesk) - New Zealand stock fell with the exchange chalking up a second weekly decline. Telstra Corp. fell, while Kathmandu Holdings rose.

The NZX 50 Index fell 6.2 points, or 0.2%, to 3,455.60. Within the index, 22 stocks fell, 17 rose, and 21 were unchanged. Turnover was $97.9 million. On a weekly basis the exchange shed 0.5%.

Telstra, the Australian phone company, fell 3.4% to $3.73 on the NZX, a day after it company signed an A$11 billion agreement to allow the Federal government's new high-speed broadband network to use its existing network and infrastructure.

"It certainly seems to be a case of buying the rumour, selling the fact," said Shane Solly, portfolio manager at Mint Asset Management. "The deal does however raise some worries about the level of investment that'll be required."

Fisher & Paykel Healthcare Corp., the manufacturer of breathing masks and respirators, fell 2.5% to $2.74, with the elevated level of the New Zealand dollar weighing on the stock. FPH earns about 54% of its revenue in U.S. dollars.

New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 2.4% to 83 cents after global oil prices tumbled in the wake of an International Energy Agency decision to tap emergency supplies to make up for Libyan supply disruptions. ICE Brent Crude futures were last trading US$108.583 a barrel, down from US$112.50 yesterday.

Nuplex Industries Ltd., the specialty chemicals maker, fell 0.7% to $3.06. The company today announced that it was teaming up with RPC Technologies to acquire Fibrelogic Pipe Systems, Australia’s biggest maker of glass reinforced plastic pipes, for A$26 million.

The acquisition was at a multiple of 3.5 times historical enterprise value to EBITDA and will make "a small positive contribution" to Nuplex’s 2012 per-share earnings, the company said in a statement.

Kathmandu, the outdoor clothing and equipment retailer, rose 4.6% to $2.30, leading gainers on the exchange amid speculation that the colder-than-expected winter in Australia will drive sales.

Telecom Corp., the country's biggest phone company, rose 1.2% to $2.51, after the Telecommunications (TSO, Broadband and Other Matters) Amendment Bill passed its third reading in parliament.

The move, while largely procedural, is seen as a further move towards the rollout of the government's $1.35 billion ultrafast broadband project.

"We've seen some brokers' research pieces that are starting to explore some of the potential outcomes from the separation which is helping to drive interest in the stock," Solly said. "The risk is that it's still some time before we see any detail and some things might not come out as expected."

Argosy Property Trust, the listed property investment vehicle looking to internalise its management contract, rose 1.2% to 82 cents.

DNZ Property Fund today teamed with other Argosy unit-holders to force a special meeting on the future of the management contract. Collectively they control 11% of the trust.

DNZ bought out its own management contract last year and chairman Tim Storey says getting rid of the external manager has resulted in "a very robust structure". DNZ shares were unchanged at $1.30.

Ecoya, the scented candle and beauty products maker, rose 5% to 84 cents after Trade Me founder Sam Morgan announced was buying $1 million of the company's stock.

Majority shareholder Business Bakery LP sold 1.25 million shares to Morgan at 80 cents apiece, according to a substantial shareholder notice lodged on the stock exchange. That gives him a 2.4% stake in the business.

NZ Farming Systems Uruguay Ltd. was unchanged at 70 cents after majority shareholder Olam International lifted the limit on its credit line to the South American dairy operator.

The Singaporean company has lifted the credit limit to US$85 million from the US$50 million loan in December to repay a syndicated loan from South American lenders and support the company’s development, it said in a statement to the NZX.

(BusinessDesk)

© Scoop Media