New Zealand shares fall ahead of holiday

Midday Market Report - 01.04.10

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Greek deal spurs risk appetites NZ stocks shrug off tepid start Investors look to Greece for reform plan Stocks pause while waiting on Greek deal Kiwi slips pending Greek deal, job numbers Stocks mixed as Greek fears sees gains sputter Risk appetites flip on whiff of a Greek deal NZ dollar gains on Greece, but still range bound NZ stocks rise, new high for Trade Me shares NZ dollar follows Aussie lead up

Goodman Fielder, the Australian food ingredients group, dropped on the NZX 50 Index after Australia’s competition regulator turned down its proposal to sell its commercial fats and oils division to Cargill.

The benchmark index shed 2.49, or 0.1 per cent, to 3265.50 as at midday. Stocks fell in New Zealand after Wall Street weakened on a report that showed private sector employment unexpectedly fell in March. 

The ADP Employer Services comes before non-farm payrolls , the key measure of the U.S. jobs market, which is out Friday in the U.S. and had been expected to show the world’s largest economy added about 180,000 jobs last month.

Goodman Fielder shed 3.6 per cent to $1.88 after the Australian Competition and Consumer Commission said the sale to Cargill would result in too much market dominance.

If Goodman can’t overcome ACCC concerns, it will retain ownership and “develop and substantially restructure its operations to improve profitability,” said managing director Peter Margin.

Kiwi Income Property Trust fell 1 per cent to 99 cents after announcing that the value of the trust’s total portfolio fell 3.9 per cent to $1.85 billion. Still, property values “are stabilising consistent with recent improvements in global economic conditions,” said Sean Wareing, chairman of the trust’s manager.

Air New Zealand  gained 2.4 per cent to $1.30 after the company denied media reports that chief executive Rob Fyfe may leave the national airline in the next 18 months.

OceanaGold, operator of the Macraes goldfield, jumped 7.3 per cent to $3.22 after announcing it has closed out all its remaining hedge facilities, allowing it to sell all its output on the spot market this year, which will drive up its cash operating margins.

The kiwi dollar traded at US70.73c, down from US70.99c late yesterday as traders await US non-farm payroll data out on Friday in the US.

The figures are being released on a public holiday, meaning trading volumes in currency markets may be thinner than usual. That runs the risk of a more dramatic reaction in currency markets if the data doesn’t meet expectations, said Chris Tennent-Brown, economist at Commonwealth Bank of Australia.

Figures released by the realestate.co.nz website showed a growing supply of unsold houses, which rose by more than 14,000 to 55,623 in March. That could take more than a year to clear, it said.

Listed finance company Pyne Gould Corp has come to the aid of South Canterbury Finance, buying $22 million worth of convertible notes in Allan Hubbard’s Southbury Corp.

George Kerr’s distressed asset fund Torchlight Fund No. 1 LP bought the securities, and has an option to buy $15.5 million worth, which will be used by the SCF parent company to buy equity in the finance company.

Kerr’s fund has already provided South Canterbury Finance with a $75 million facility that has been fully drawn down.

The Overseas Investment Office has asked for more information from Natural Dairy (NZ) Holdings after the Hong Kong-listed company that’s looking to buy some of the Crafar family’s dairy assets in part of a $1.5 billion buy-up didn’t pay the correct fee.

The company also made a statement to the Hong Kong exchange asking for a waiver on the release of a circular that will include more details about its acquisition plans.

The Ministry for the Environment has backed a government plan to replace Environment Canterbury councillors with a commission, albeit reluctantly.

In its regulatory impact statement (RIS), director of natural and built systems Mark Sowden said that although the proposal was the only one put forward that will likely meet the government’s objectives, there were “significant risks” to suspend local body elections, and that such a course of action “should only be considered in exceptional circumstances.”

The RIS warned the short timeframe to draft the legislation increased the risk that intervention was “incorrectly targeted” and could lead to unintended consequences that would require later legislation.

- BusinessDesk