MIDDAY UPDATE: NZ construction keeps economy ticking over

By Paul McBeth

Dec. 20 (BusinessDesk) - Increasing activity in New Zealand's construction sector underpinned economic growth in the September quarter with the Canterbury rebuild and bubbling Auckland property market among the few signs of life in the period.

Gross domestic product grew 0.2 percent in the three months ended Sept. 30, slowing from a revised pace of 0.3 percent in the June quarter, Statistics New Zealand said. That fell short of economists' expectations of 0.4 percent growth, and the expansion was largely on the back of a 4.5 percent increase in construction activity.

"From here, we really rely on the Christchurch rebuild to continue, and to be fair the anecdotes are good - things are definitely gearing up," said Darren Gibbs, chief economist at Deutsche Bank NZ. "Construction could account for almost half the growth we get over the next 12 months."

The economy grew at an annual pace of 2.5 percent, and was 2 percent higher than the same quarter a year earlier. Revisions to previous quarters showed New Zealand dipped back into recession in the second half of 2010, with two 0.3 percent contractions in each quarter. The revisions arose from changes to Statistics NZ's annual benchmarking and methodologies.

Sam Morgan sells $7.4 mln stake in Xero

Trade Me founder Sam Morgan sold a $7.4 million stake in cloud-based accounting software firm Xero, a company he's a director of.

The sale to New Zealand institutions reduces his stake to 4.37 percent, and means he's no longer a substantial security holder.

The sell-down takes advantage of Xero's soaring stock price, which has jumped 179 percent this year, and Morgan said he took the opportunity to rebalance his portfolio as a result of the appreciation.

Xero's shares fell 0.3 percent to $7.68.

SkyCity sells out of Christchurch casino, buys out Queenstown partner

SkyCity Entertainment Group, which operates hotels and casinos across Australia and New Zealand, has sold its half-share of Christchurch casino and taken full ownership of Queenstown’s gaming centre.

The Auckland-based company sold its 50 percent share in Christchurch casino for $80 million to tourism operator Skyline Enterprises and bought Skyline’s 40 percent stake in the Queenstown operation for $5 million, SkyCity said in a statement.

The Christchurch casino contributed $5.6 million to SkyCity’s 2012 earnings, 9.7 percent lower than a year earlier as it struggled with post-earthquake operating environment. In contrast, Queenstown’s revenue climbed 12 percent to $8.6 million and contributed earnings of $1.5 million to SkyCity on rising numbers of Asian visitors.

SkyCity's shares rose 1.1 percent to $3.83 in trading today.

Brierley keeps selling GPG shares

Guinness Peat Group founder Ron Brierley has sold another 5 million tranche of shares in the investment firm, cashing up $11.73 million of stock since he started selling in October.

The veteran corporate raider sold the shares yesterday at 47 Australian cents apiece for some A$2.35 million, or $2.95 million in New Zealand dollar terms, according to a statement lodged with the stock exchange. That leaves Brierley with some 31.9 million shares, or 2.01 percent, or GPG.

The shares were unchanged at 58.5 cents on the NZX today.

(BusinessDesk)

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