NZ stocks: Soft overseas trade and ex-div stocks push shares down

12.00pm


The New Zealand stock market's leading indicators eased into negative territory in morning trade today, weighed down by lacklustre overseas trade on Friday and a slew of local companies going ex-dividend.

By 11.30am the NZSX-50 gross index was down 0.96 points or 0.04 per cent to 2360.63, while the NZSX-40 capital index was down 12.62 points or 0.57 per cent to 2190.40. Turnover was $22.43 million.

The NZSX-40 was dragged lower compared to the NZSX-50 by Contact Energy, Hallenstein Glasson, Mainfreight, Kiwi Income, Powerco, Sanford, TrustPower all going ex-dividend.

The difference between the two indices was a clear demonstration of why the NZX had moved to favour the NZSX-50 gross which strips out the effects of stocks going ex-dividend, ASB Securities' Ian Witters said.

On the NZSX-50, the one point fall was due primarily to market leader Telecom which was down 4c to 507. "That's probably a reflection on some ho-hum trading on overseas markets on Friday", Mr Witters said.

Telecom also confirmed this morning it plans to restructure its Australian operations. Telecom plans to put AAPT and Telecom New Zealand Australia into a single business unit, cutting the two subsidiaries' locations from five to two and trimming the 1200 strong workforce.

Overall trading was very quiet he said. 'We've got Monday-itis here and on top of that we're following on from a negative day on Friday in the States".

Amro Craigs Equities retail advisor Bryon Burke said trading seemed to be following on Friday's local session, "volume was light and a few stocks had funny trading patterns because of that. Stand aside and see what happens seems to be what investors are doing, it's very light trading again," he said.

Even by late morning a number of major stocks were yet to trade while others were unchanged. "I guess it's steady as she goes on light volumes", Mr Burke said.

Pacific Retail was down 10c to 240 by 11.30am but ASB Securities' Mr Witters downplayed the move. "It's a pretty il-liquid stock and it doesn't take much to move it 10c either way. It's a stock where the jury is out on just what will happen in the UK."


Pacific Retail, which owns electrical goods retailer Noel Leeming, Bond & Bond, Computer City and the Bendon lingerie brand, is currently making a push into the UK market.

Meanwhile among the stocks to go ex-dividend this morning, Contact Energy which was paying 17.5 cents per share fell 17c to 528 by 11.30am, Hallenstein Glasson paying 9.5 cps was unchanged at 298, Mainfreight, 3 cps was down a cent at 135, Kiwi Income, 3.77 cps was down 5c at 103, Powerco, 7.2 cps was down 3c at 180, Sanford, 32cps (including 20c special dividend) was down 34c at 520 and Trustpower, 17 cps was down 4c at 601.

Elsewhere on the market, AMP was 5c higher at 670, BayCorp Advantage was 2c higher at 303, Dorchester Pacific Group was down 3c to 217, Fisher and Paykel Appliances was up 4c at 390, Wellington department store Kirkcaldies was down 10c to 340, Michael Hill was down 3c at 470, and Software of Excellence was up 5c at 105.

By 11.30am there were 21 rises and 35 falls on 107 stocks traded.

Meanwhile on Friday in New York, stocks fell after a report showing surprisingly soft US jobs growth and a disappointing outlook from Intel Corp curbed optimism over the strength of the economic recovery.

The Dow Jones industrial average ended down 68.14 points, or 0.69 per cent, at 9,862.68 . The Standard & Poor's 500 Index ended off 8.22 points, or 0.77 per cent, at 1,061.50.

In London the FTSE 100 share index closed down 11.2 points, or 0.26 per cent, at 4,367.0 points, but the index still ended 24.4 points higher over the course of the week.

Germany's DAX index ended at 3,841.73 points, down 33.05 or 0.85 per cent and in Tokyo the tech-sensitive Nikkei average finished down 0.54 per cent or 56.53 points at 10,373.46.

- NZPA