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MARKET CLOSE: NZX50 falls on global growth fears; APN drops

MARKET CLOSE: NZ stocks fall on global growth fears; APN leads decliners, Kathmandu rises

By Jason Krupp

Aug. 2 (BusinessDesk) - New Zealand stocks fell as concerns over the faltering pace of global growth on the back of a spate of weak manufacturing data doused any post U.S. debt deal enthusiasm. APN News & Media Ltd. led decliners, while Kathmandu Holdings rose.

The NZX 50 Index fell 16.83 points, or 0.5%, to 3,397.01. Within the index, 20 stocks fell, 17 rose, and 13 were unchanged. Turnover was $109.5 million.

Stock markets across Asia Pacific were in negative territory for most of today after U.K and U.S. July manufacturing numbers came in shy of expectations. In afternoon trade the Nikkei 225 Index fell 1.4% to 9,825.98, Hong Kong's Hang Seng Index fell 0.7% to 22,506.07, and Australia's S&P/ASX 200 Index shed 1.2% to 4,443.2.

"The weaker global manufacturing data is certainly causing a turbulent time here and in Australia," said Rickey Ward, domestic equities manager at Tyndall Investment Management. "There are also some issues around the potential U.S. credit rating downgrade hanging over the market."

Dual-listed and currency sensitive stocks took the brunt of the selling pressure today, with APN, the Australian media company, falling 8.1% to $1.37 on the NZX, and declining 3.6% on the ASX at A$1.085. Shares in the company, which publishes the New Zealand Herald and operates the Radio Network, are rated as a 'hold' according to 13 analysts polled by Reuters.

AMP Ltd., the Australian wealth manager, fell 4% to $5.60. Australia & New Zealand Banking Group, the country's biggest lender, fell 3.1% to $26. Westpac Banking Corp., the Australian lender, fell 2.9% to $25.48.

Fletcher Building Ltd., the nation's biggest construction firm, fell 2.6% to $8.02.

Tourism Holdings, the campervan rental company, fell 2.9% to 66 cents after a takeover bid by Switzerland-based investor John Grace closed short of its acceptance target after an independent valuation said the company was worth more.

Grace’s Ballylinch LP investment vehicle had offered 67.5 cents a share to lift its stake to between 50.01% and 52.2%. A valuation by Simmons Corporate Finance said the company was worth 97 cents to $1.27. Ballylinch has a 19% stake in Tourism Holdings.

NZX Ltd., the securities market operator, fell 2.5% to $2.37, with some uncertainty hovering over the stock as investors wait for the Financial Market Authority's report on conflicting disclosures surrounding NZX's Clear grain exchange.

Kiwi Income Property Trust, the country's biggest listed property investment vehicle, was unchanged at $1.02 after it announced the sales of two properties, with the non-core assets "logical candidates for capital recycling".

The sales were for 50 The Terrace in Wellington, which sold for $6.37 million, and 1-17 Broadway Avenue in Palmerston North, which sold for $2 million, according to a statement released by the trust. Both sales were on par with book value, the trust said.

Kathmandu, the outdoor clothing and equipment retailer, rose 6.8% to $2.30 on upbeat earnings, leading gainers on the exchange. Full-year pretax earnings rose between 31% and 36% on new store openings, favourable weather and better inventory management, it said.

Earnings before interest and tax were $63 million to $65 million in the year ended July 31, up from $47.9 million a year earlier, the Christchurch-based company said in a statement. Sales rose 25% to $306 million, or a gain of 22% in constant currency terms. Same store sales rose 15.7%.

"Kathmandu continues to buck the trend of what is clearly a difficult retail environment," Ward said. "It's a credit to their business structure, proof that the three sale policy does work," he said referring to its triennial promotions.

Skellerup Holdings, the rubber goods and milking equipment manufacturer, rose 2.4% to $1.26.

AMP NZ Office Ltd., the specialist investor in office properties, rose 2.4% to 86 cents.

Goodman Fielder Ltd., the Australian food ingredient manufacturer, rose 1.8% to $1.15.

Heartland New Zealand Ltd., the would-be bank, rose 1.6% to 63 cents after it said it is on target to deliver its maiden profit.

The Christchurch-based lender said it made net profit of between $6 million and $8 million in the year ended June 30, including the one-off costs of merging the three mezzanine financiers.

Telecom Corp., the country's biggest phone company, rose 1.3% to $2.673 after it announced that it had settled a long-running legal battle with Vodafone today.

The disputes related to levies for rural telephone services under the now defunct Telecommunications Service Obligations by Vodafone to Telecom, which Vodafone argued were higher than they should be. Terms of the settlement are confidential.

Telecom’s shares were halted for almost an hour after spiking above $3.30 an error led to the jump in the share price. NZX Market Supervision cancelled the trade to protect the market’s integrity, it said in a statement.

Vital Healthcare Property Trust, the specialist investor in medical clinic properties, rose 0.9% to $1.16 after it announced today that it will increase is foreign exchange hedging to between 90% and 100% of the value of its net assets in Australia to counter the strength of the local currency.

The kiwi dollar has rebounded against its trans-Tasman counterpart having dropped as low as 72.80 Australian cents in March, and recently traded 79.73 cents.


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