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| Weekly Commentary | | For archival copies of the Weekly Commentary click here... | | | | 22nd May 2010 | New Zealand share prices were at their lowest point in three months as world markets continued to take fright over events in Europe. Markets in general, the local bourse included, had grown more nervous after Germany stepped up efforts to ban specific types of short selling in an attempt to thwart speculators. There was also some reluctance to trade in the local market in run up to Finance Minister Bill English’s second budget. Telecom, which announced that chief financial officer, Russ Houlden, had resigned, traded at $2.05 – a new 52-week low. Houlden’s departure adds to a growing list of top executives to leave the troubled telco over the last few months. Local oil-related stocks were weaker. Oil explorer and producer NZ Oil & Gas fell sharply was oil prices declined. NZ Refining was also down after it said its gross margins were under pressure again. Among the few stocks to gain were fishing company Sanford and retail giant, The Warehouse.
Financial turmoil in the European Union drove Australian stocks to their lowest point in nine months. Profit-taking pervaded the market as big investment funds opted to play safe. Mining and financial stocks bore the brunt of selling. Mining giants BHP Billiton and Rio Tinto were both well down. Gold mining stocks, which in the past have tended to benefit from market uncertainty because of the bullish impact it has on gold prices, were weaker. Leading gold miner Newcrest and its takeover target Lihir, were both soft. Fortescue Metals dropped after it said two of its three expansion projects were being put on hold because of the proposed federal government’s “super” tax on resource profits. The “big four” banking stocks were all sharply weaker on the back of deepening problems in the European Union, which stemmed originally from Greece’s sovereign debt blowout. National Australia Bank, Westpac, ANZ and Commonwealth Bank were all sharply weaker.
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