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Market close: NZ shares fall on weak China, Budget yawn

Thu, 24 May 2012

BUSINESSDESK: New Zealand shares fell on a day the government announced a "zero" Budget and Chinese manufacturing data weakened.

Fletcher Building, Nuplex Industries and Rakon were among decliners.

The NZX 50 Index fell 14.01 points, or 0.4%, to 3496.18. Within the index, 24 stocks fell, 16 rose and 10 were unchanged. Turnover was $82 million.

The government today forecast a return to budget surplus in 2015, with few surprises for financial markets and a broad prediction of improving economic growth.

Crown debt as a percentage of the economy would peak below 30%.

Meantime, Chinese manufacturing figures showed production in the world's second-biggest economy may shrink for a seventh month.

"The Budget was mildly positive for the markets - pointing out to the rest of the world again that our balance sheet is looking pretty good," Bryon Burke, head dealer at Craigs Investment Partners.

“In this time of global uncertainty to have a Budget, dollar and share market that does nothing is marginally positive."

Fletcher Building fell 2.2% to $6.16 while Telecom, the biggest company on the exchange, gained 0.2% to $2.58.

Outdoor equipment chain Kathmandu fell 3.8% to $1.53 and was the biggest decliner today.

Nuplex fell 2.9% to $2.38 and Rakon dropped 2.1% to 47 cents.

Xero fell 1.2% to $4.20. The the online accounting software company today reported that its annual net loss swelled 5% to $7.9m even as its annualised committed revenue rose 82% to $25.5m and customer numbers more than doubled.

Xero said its loss in the current year is likely to be even larger as it builds the business, planning for significant growth in offshore markets.

Fisher & Paykel Appliances rose 2.8% to 55.5 cents after the company beat its full-year guidance for both appliances and finance while posting a decline in earnings, while warning that the outlook for 2013 is for soft retail markets with weaker demand in Australia.

Net income dropped 45% to $18.4m in the 12 months ended March 31, from $33.5m a year earlier, the Auckland-based manufacturer said in a statement.

Sales fell 7.4% to $1.04 billion.

"The result probably pleased a few people," Mr Burke said.

“The take on the appliance side has done OK given the environment - again, the finance business has done really well to increase the bottom line and we are in an environment where the dollar s weak so things are weaker."

Guinness Peat Group rose 2.1% to 49 cents after founder Ron Brierley was re-elected to the board, following calls for his ousting.

"The management disagreements have been going on for a number of years - would be smoother sailing if one or another no longer had an input,” Mr Burke said.

“We are still going to see opposing views on the board."

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Market close: NZ shares fall on weak China, Budget yawn