MARKET CLOSE: NZ shares fall on busy trading day; Telecom drops, SkyCity gains
Feb. 7 (BusinessDesk) – New Zealand shares fell in the busiest session so far this year, paced by Telecom amid concern the earnings season may not reveal results that warrant high stock valuations. SkyCity Entertainment rose.
The NZX 50 Index fell 16.706 points, or 0.4 percent, to 4195.24. Within the index, 26 stocks fell, 12 rose and 12 were unchanged. Turnover was $202.7 million, almost twice the daily average.
Telecom fell 2 percent to $2.305 with 11.4 million shares changing hands. Fletcher Building, the biggest company on the index, fell 0.8 percent to $8.90, with 7.4 million shares traded. Sky Network Television, the nation’s dominant pay-TV company, ended the day unchanged at $5.17 with 4.4 million shares changing hands.
‘On one side there’s a question mark about some of the earnings,” said David Price, a broker at Forsyth Barr. “We’ve had quite a strong run and multiples are above 15” for the NZX 50. “If the earnings are there, that’s fine,” he said.
Government figures showed that even while the unemployment rate declined to 6.9 percent in the fourth quarter, the participation rate fell to 67.2 percent, its lowest level in almost nine years and employment shrank 1 percent, painting a tepid picture of the labour market and broader economy.
Pumpkin Patch, the children’s clothing chain, fell 2.9 percent to $1.33, the biggest decline on the NZX 50.
Xero, the cloud-based accounting company, fell 2.7 percent to $6.84 even after announcing late in the trading session that it added more than 23,000 customers to its client list since December and is on track to double last year's $19.3 million in annual revenue.
Chorus, the network company spun off from Telecom in 2011, was unchanged at $2.86 on a day it said its general manager of network build Chris Dhyrberg will leave the company in April. Dhyrberg has been responsible for the roll-out of the ultra-fast broadband fibre network and the company’s joint venture with Vodafone New Zealand to deliver the rural broadband initiative.
Guinness Peat Group was steady on 60 cents after the investment firm liquidating its portfolio sold out of ASX-listed aluminium fabrication group Capral for some A$85.3 million.
SkyCity rose 1.5 percent to $4.03 and Australia & New Zealand banking Group climbed 2.7 percent to $34, leading gainers on the NZX 50.
PGG Wrightson, the nation’s biggest rural services company, fell 2.3 percent to 43 cents.