NZ share market falters

New Zealand stocks fell for the second time in three sessions, as the collapse of South Canterbury Finance  triggered a $1.6 billion payout under the retail deposit guarantee scheme, and put pressure on the kiwi dollar. PGG Wrightson, NZ Oil & Gas, and Nuplex Industries paced decliners on the exchange.

The NZX 50 fell 0.7 points, or 0.02 percent, to 3036.1. Within the index, 14 stocks fell, 22 rose and 14 were unchanged. Turnover on the day was $111.9 million.

The nation's second biggest lender was placed into receivership earlier after the failing to reach a deal for a rescue, triggering a gross payment under the government guarantee triggering a selloff in the New Zealand dollar. The Australian dollar was last trading at 0.78 cents to the kiwi.

"The market is down on the selloff in the New Zealand dollar more so than in the equity markets, with the cross rate against the Australian dollar somewhat softer," said Grant Williamson, a director at Hamilton Hindin Greene.

"We've seen some selling in the (kiwi) dollar now that the government has had to come though on the Crown guarantee, which has weakened their balance sheet to some degree."

South Canterbury chief executive Sandy Maier said the appointment of receivers Kerryn Downey and William Black of McGrathNicol was inevitable once it became clear talks for new money wouldn't be completed by the close of business today, when its trust deed waiver expired.

The collapse means the government faces a net liability in the ball-park of $600 million to cover SCF's 35,000 eligible investors, once the receiver has clawed back cash from asset sales.

Wrightson, the rural services company, fell 1.8 percent to 54 cents, leading declines on the day.

NZ Oil & Gas, the energy exploration and development company, fell 1.7 percent to $1.15, tracking the crude oil price down as offshore equity markets weakened. Nuplex, the industrial resin and chemical, fell 1.6 percent to $3.10.

Fletcher Building, the biggest company on the NZX 50, fell 1.2 percent to $7.52, after New Zealand's residential property sector slipped in July after edging into positive figures in the previous month according to data released by Statistics New Zealand today.

Consents for new buildings, excluding apartments, fell 5.3 percent last month, after a 1.1 percent rise in June.

Genesis Research and Development, the Auckland-based biotechnology company which was forced to halt operations last year after running out of cash, was unchanged 4.5 cents today after announcing it had narrowed losses.

The company today posted a net loss $511,000, or 1.37 cents per share, compared to a loss of $1.2 million, or 4.61 cents. It also said it may also get another cash injection from new cornerstone investor, May Wang.

Pacing gainers on the NZX 50, APN News & Media, which publishes the NZ Herald and operates the Radio Network, rose 4.3 percent to $2.42, Michael Hill International, the jewellery retailer, rose 3$ to 69 cents, and financial services company Pyne Gould rose 2.4 percent to 42 cents.

Property stocks rose on a report by the New Zealand Institute of Economic Research which said it expects New Zealand economy to bounce back to annual growth near 3 percent in 2012, despite tough near term prospects for the construction sector.

ING Property Trust rose 2.9 percent to 70 cents, Kiwi Income Property Trust rose 1.1 percent to 96 cents, and Goodman Property trust was unchanged at 93 cents.

ANZ National Bank chief executive Jenny Fagg is to step down immediately from the role to undergo cancer treatment, the nation's biggest lender announced today.

The bank's current deputy chief executive, Steven Fyfe, will step up to lead operations in New Zealand effective from Thursday.

Mighty River Power, the state-owned electricity generator and retailer, reported substantially reduced earnings in the year to June 30, with underlying earnings falling 34 percent to $139.6 million, compared with a record $211.7 million last year.

The conditions that produced the previous year's result - a coincidence of high Waikato hydro system inflows and high wholesale power prices - reversed in the year under review, with a severe Waikato catchment drought coinciding with high spot prices.

- BusinessDesk