MARKET CLOSE: NZ stocks fall as global fears continue; Skellerup leads decliners, Cavalier rises
By Jason Krupp
Aug. 9 (BusinessDesk) - New Zealand stocks fell as international markets continued their slide across Asia Pacific today, even as Australian shares unexpectedly gained. Skellerup Holdings led decliners, and Cavalier Corp. rose.
The NZX 50 Index fell 87.67 points, or 2.8%, to 3,097.77. Within the index, 43 stocks fell, one rose, and six were unchanged. Turnover was $133.8 million.
Most stock markets across the Asia Pacific region fell sharply for a second day as investors dumped so-called risk assets amid fears the officials in Washington and Europe will be unable to prevent their economies slipping back into recession. In afternoon trade, Hong Kong's Hang Seng Index plummeted 6% to a 14-month low of 19,258.51, Japan's Nikkei 225 Index fell 2.5% to 8,868.64, and Singapore's Straits Times Index fell 3.7% to 2,884.0.
The one standout performer in the region was Australia's S&P/ASX 200 Index, which was recently up 0.07% at 3,988.70, as bargain hunters picked over earlier losses. The strong performance across the Tasman was enough to help lift the NZX off its intraday low of 3,055.18, although the local exchange was still hovering near an 11-month low.
"This is the first time Australia has outperformed in a while and it’s a stunning turnaround," said James Lee, head of institutional equities at First NZ Capital. "It's a very impressive feat on very little news."
The bounce in Australian stocks is however likely to be a one off, Lee said, with the sentiment still negative towards equities ahead of the U.S. market open. Futures on the Standard & Poor Index recently traded at 1,093.0, down 1.7%.
"No one is looking forward to market open with U.S. futures still very negative," Lee said.
Skellerup, the rubber goods and milking equipment manufacturer, led the exchange lower with the stock falling 8.2% to $1.12, the lowest level since Dec. 15.
APN News & Media Ltd., which publishes the New Zealand Herald and operates the Radio Network, fell 7.7% to $1.20.
Methven Ltd., the tapware manufacturer, fell 6.3% to $1.35.
Clothing retailers ignored improved electronic card spending data today, which showed New Zealand consumers spent 5.7% more on clothing and apparel in July than the month before.
Kathmandu Holdings, the outdoor clothing and equipment retailer, fell 6.2% to $1.97. Hallenstein Glasson Holdings, the fashion retailer, fell 5.6% to $3.21.
Telstra Corp., the Australian phone company, fell 5.6% to $3.40.
NZX Ltd., the securities market operator, fell 5.5% to $2.06.
New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 4.7% to 61 cents, with the sudden decline of oil prices in the wake of the U.S. credit rating downgrade adding additional pressure on the stock. ICE Brent Crude futures were last trading at US$101.55 a barrel, down from US$1.06.88 yesterday.
Contact Energy, the country's biggest listed electricity company, fell 1.8% to $4.82. The company today effectively slashed its electricity tariffs for prompt paying online customers after losing more than 8,000 customers in July.
The numbers represent the second month of record losses for the company since the Electricity Authority began a campaign urging consumers to shop around for lower power prices.
Contact lost 7,679 customers in June, the first month of the "What’s My Number?" campaign, and the pace accelerated last month, with a further 8,034 customers leaving for other retailers last month.
Cavalier Corp. was the only stock on the NZX 50 to chalk up gains today, rising 1.6% to $3.20, although still near a six month low. The stock is rated as 'outperform' according to the consensus view of four analysts compiled by Reuters.
OceanaGold Corp., the gold miner, rose 4.2% to $2.50 after gold rose to a fresh historic high of US$1,770.09 today amid an investor rush to so-called safe haven assets.
Cavotec MSL Holdings, the global engineering company which owns Christchurch-based Moormaster, was unchanged at $2.66 after it said it had successfully renegotiated a 50 million euro loan with a syndicate of European banks, extending the maturity date to 2016 at improved pricing.
Cavotec said the term and revolving loan facility also includes an option to increase the loan up to 80 million euros at any time during the term of the loan.