By Jason Krupp
New Zealand stocks fell, snapping two days of gains, with a weaker performance by Telecom weighing on the market on a day marked by heightened nervousness ahead of the key non-farm payrolls report out of the U.S. on Friday.
The NZX 50 Index fell 29.04 points, or 0.9%, to 3,303.21, and but rose 0.2% on a weekly basis. Within the index, 25 stocks fell, 15 rose, and 10 were unchanged. Turnover was $102.1 million.
The kiwi dollar traded at 85.06 U.S. cents at 5 p.m., little changed from 85.09 cents at 8 a.m. and 84.88 cents yesterday in New York trading. The currency gained 1.4 percent this week. It rose to 72.91 on the trade-weighted index from 72.74 yesterday.
Asia Pacific markets across the board recently traded in the red amid fears that the release of U.S. non-farm payrolls later tonight will point to further structural weakness in the world's biggest economy. Investors are already pricing in a significant in the headline number, with expectations of 60,000 being added in August, down from a gain of 117,000 in the previous month.
"Every single data point is either recession- on or recession-off, the mood is changing that quickly," said Greg Easton, an adviser at Craigs Investment Partners.
Telecom fell 3.8% to $2.40, leading decliners on the exchange after the Commerce Commission ruled the phone company's unbundled bitstream access service, which lets rivals differentiate their products from Telecom’s retail offerings, doesn’t have strong competitors and will continue to be regulated nationwide.
That means the company's Chorus unit will still be obligated to meet the existing terms, even after Telecom carves itself up in a bid to tap tax-payer funds to build a nationwide broadband network and shed some of its regulatory burden.
"Obviously the announcement has not been taken well by the market," Easton said. "Regulation is something of a real filthy word in the minds of some investors."
Guinness Peat Group, the investment holding formerly controlled by Sir Ron Brierley, fell 3.6% to 66 cents.
Team Talk Ltd., which owns the CityLink fibre optic network, fell 1.4% to $2.16 after Active Communications Ltd. sold just under two-thirds of its stake in the company, leaving it with 14.4% shareholding in the firm.
Over $10 million worth of TTK shares changed hands today, accounting for about 10% of total turnover on the main board of the NZX.
Rakon lead gainers on the exchange, with the stock climbing 2.6% to 80 cents, clawing back some of this week's losses after the maker of crystal timing components said annual operating profit could fall by as much as 44% if the New Zealand dollar remains are current levels.
New Zealand Wool Services International Ltd. rose 8% to 54 cents after the wool scourer and exporter more than quadrupled net profit, with earnings for the 12-months to June 30 coming in at $6.6 million, up from $1.1 million last year.
The Christchurch-based company boosted sales 33% to $200.1 million as international demand for wool and a supply shortage helped bolster revenue.
Tourism Holdings, the campervan rental company hurt by the Christchurch earthquakes and Queensland flooding earlier this year, rose 1.6% to 62 cents after it said it's branching out of its traditional markets further, signing a contract to supply St. John with ambulances.
The company’s Ci Munro subsidiary will supply the emergency services provider with customised vehicles for the next five years in a deal that is expected to see the first tranche of 50 new vehicles rolled out over the next 12 months, worth an initial $6.8 million.
Air New Zealand Ltd., the national carrier, rose 0.9% to $1.12 after it announced that $150 million of unrated five-year bonds was snapped up by institutions and market participants, leaving none for the general public. They pay a coupon rate of 6.9%.
Wakefield Health Ltd., the hospital operator which recently took control of Norfolk Investment Ltd., was unchanged at $5.10 after it said it had agreed to buy a 30% interest in Endoscopy Auckland Ltd. and Laparoscopy Auckland Ltd. for $6.8 million as part of its ongoing expansion strategy.
The purchase will give the Wellington-based company a 30% share in the two businesses, with an option to extend its stake to 50% over the next five years.