Tower shares slip as quake impact hits home

Shares in Tower dropped 4% today as the insurer and fund manager disclosed its costs were likely rise as much as $20 million due to the Christchurch earthquake and its aftershocks.

Tower warned the extra expenditure cannot be recovered in the current financial year to September 30 and that its net profit would be eroded.

Its payouts direct to policy-holders had been expected to be only $5 million after the September quake but in the wake of the catastrophic February 22 aftershock -- thought to have killed more than 200 people -- it has had to spend much more money on the re-insurance policies that underpin its clients.

The company, whose shares fell 8c to 186, also warned that the increase in re-insurance premiums would ramp up the premiums for retail customers.

Meanwhile, 2.9 million Fletcher building shares changed hands for $25.9 million as the stock shed 7c to 879, after a senior executive said it could cost $30 billion to rebuild Christchurch.

The benchmark NZX-50 index finished down 23.39 points at 3382.84, after falling 8.19 points yesterday. Of the 114 stocks traded, only 16 rose in price and 61 fell. Over the week, 231.6 million shares valued at $680 million were traded.

The day's trade included 10 million Telecom shares valued at $20.6 million,as the exchange's cornerstone stock stayed steady at 204c.

Some of the biggest falls in percentage terms were NZX, the exchange operator, which fell 3.3% or 7c to 203, PGG Wrightson, down 3.8% or 2c to 51, and miner Oceana Gold, down 5.5% or 20c to 345.

Child's clothing retailer Pumpkin Patch, slipped 3%, or 4c, to 127 on 2.1 million shares valued at $2.75 million. The Warehouse rose 7c to 345 after the company reported a fall in interim profit but held its interim dividend.

The company is being hurt by lower CD and DVD sales but said sales in many categories are growing, including in homewares, appliances, sporting goods and health and beauty. The company is forecasting a full-year net profit between $76 million and $80 million compared with $83 million last year.

Air NZ fell 1c to 121 after it said it was increasing airfares. Contact Energy eased 2c to 597.

After Mainfreight's stellar rise earlier this week -- after announcing a deal to buy Netherlands-based transport and logistics firm Wim Bosman Group -- the stock eased 6c to 882, after falling 22c yesterday.

Across the Tasman, the Australian share market suffered its worst weekly fall in just over nine months, with major indices down more than 4% at the close.

The benchmark S&P/ASX200 index was 54.9 points, or 1.2%, lower at 4644.8.