NZX falls away at end of week

05:58, Feb 01 2013

The tsunami of investment that pushed the New Zealand sharemarket to record highs last month has receded slightly as the NZX dropped 6.7 points to 4245.93 at its close today.

Rural services firm PGG Wrightson led the decliners as near-drought conditions and flooding hit rural communities on either side of the Tasman, while clothing retailer Kathmandu led gainers after upgrading its profit outlook for the half year.

Kathmandu was up 4 per cent to $2.30 after estimating a net profit for the six months ending January 31 in the range of $9.5 million to $10.5m, compared to $6m recorded for the same period last year.

Mint Asset Management portfolio manager Shane Solly said strong performing stocks such as Fletcher Building and Steel & Tube had come off the boil” as the NZX experienced a breather.

“There was defintely a tsunami of cash doing a lap around the world looking for places to invest out of cash and bonds and New Zealand’s benefited from that because we’ve got a whole bunch of companies that are modest risk with good sustainable yields,” Solly said.

Casino owner Sky City Enetrtainment dropped 0.7 per cent to $3.94 after the company today denied speculation that it had any solid plans to expand into Asia.


On the NZX50 Index 19 stocks were down, 16 were up and 15 remained unchanged over the day.

Of the decliners PGG Wrightson fell 2.2 per cent to 43 cents, AMP was down 1.6 per cent to $6.55, and Property for Industry dropped 1.6 per cent to $1.23.

Freightways fell 1.5 per cent to $4.47, Heartland NZ dropped 1.4 per cent to 67 cents and Xero was down 1.4 per cent to $7.17.

Following Kathmandu on the upside was Warehouse Group up 3.4 per cent to $3.35, Summerset Group up 2.5 per cent to $2.46, and New Zealand Oil and Gas up 2.2 per cent to 93 cents.

On the currency markets the kiwi dollar was at US84.07 cents at 5pm today, down from US84.20 cents early this morning.

Solly said further comments by reserve Bank governor Graeme Wheeler today had little impact on the equities markets but pushed up the kiwi relative to the Australian dollar.

In a speech to the Canterbury Employers' Chamber of Commerce Wheeler said returning to fiscal surplus and lowering public sector indebtedness would strengthen the New Zealand economy's resilience.

Solly believed lower than expected Purchasing Managers Index figures out of China also helped boost the kiwi dollar against the Australian currency and the Yen.

On the crosses at 5pm the kiwi dollar traded at 80.82 Australian cents, up from 80.62 this morning, and 77.20 Japanese yen, up from 76.90 earlier.

The kiwi was trading at 61.78 Euro cents, down from 62.01 this morning, and 53.00 pence, down from 53.08 earlier.

The Trade Weighted Index against major trading partners' currencies was at 75.80, up from 75.20 earlier today.

The 90 Day Bank bill rate was at 2.7 per cent.