Telecom leads declining stocks on NZX-50

Telecom led decliners on the NZX 50 Index after its proposal for a national ultra-fast broadband network was pushed down the government’s priority list by three regional plans.

Steel & Tube Holdings extended its gains on the prospects of demand from the Christchurch earthquake.

The NZX 50 fell 15.93, or 0.5 percent, to 3145.24 as at midday, heading for its second straight decline after a five-day rally.

Telecom fell 5.2 percent to $2.02 after Crown Fibre Holdings said it had prioritised three regional deals in its short list for the government funded roll-out of an ultra-fast broadband network.

The government agency whittled down its list to 14 contenders, and has put three regional bids at the top of its negotiation list, damping the opportunity for a national solution such as Telecom has offered.

Vector, the lead partner in the Regional Fibre Group which also put forward a wide-ranging proposal, dropped 1.4 percent to $2.05.

Steel & Tube climbed 1.7 percent to $2.46. The Treasury has assessed the total cost of the Canterbury earthquake at $4 billion. Rebuilding is likely to swell demand for Steel & Tube’s products including steel reinforcing.

Fletcher Building, the biggest company on the NZX, rose 0.1 percent to $8.17 on news that the value of New Zealand’s total building work hit an 18-month high in the June quarter as the construction sector bounced back from a slump. Data from Statistics New Zealand shows that while the sector is noticeably up on its low in September last year, it is still 18 percent below a peak in December 2007.

Windflow Technology, which makes turbines for windfarms, fell 4.4 percent to $1.10 after the company revised up its loss for the year ended June 30 to $7.95 million because of costs of remedial work for customer NZ Windfarms.

The manufacturer previously estimated the loss at $5 million to $6 million. The increased loss "arises from additional provisions WTL has recorded in respect of the full costs of remedial work arising from the agreement reached with NZ Windfarms."

Shares in wealth manager AMP fell 1.7 percent amid news the Australian Competition and Consumer Commission knocked back National Australia Bank’s revised bid to takeover Axa Asia Pacific’s Australasian businesses. AMP’s bid for the assets was trumped by NAB, though the wealth manager has already secured regulatory approval for a deal to go through.

Rural lender Pyne Gould paced gainers, up 2.4 percent to 42 cents, while carpet maker Cavalier increased 2.3 percent to $2.71.

Talley’s Group continued its buy-up of Affco Holdings, lifting its stake in the meat processor to 80.2 percent as it seeks to take over the company. The shares were unchanged at the offer price of 37 cents.

The New Zealand dollar climbed back above US72c as fears about the state of Europe’s sovereign debt eased amid strong demand for Portuguese government bonds, while the Federal Reserve issued a downbeat outlook on the US economy. The kiwi recently traded at US72.08c from US71.90c yesterday.

- BusinessDesk