RKET CLOSE NZ shares slip as China PMI tempers optimism

MARKET CLOSE NZ shares slip as China PMI tempers optimism; Fletcher, Telecom fall

March 1 (BusinessDesk) – New Zealand shares fell, easing the NZX 50 Index from a 5-year high, as a key measure of China’s manufacturing missed estimates and the local market subsided after a month-end flurry. Fletcher Building and Telecom fell.

The NZX 50 fell 2.01 points, or 0.04 percent, to 4317.98. Within the index, 18 stocks fell, 25 rose and seven were unchanged. Turnover was $175 million.

The official Purchasing Managers’ Index in China, New Zealand’s second-largest export market, fell to 50.1 in February, the weakest in five months, tempering optimism after a New Zealand earnings season that didn’t show up too many nasty surprises but did reflect some caution about the outlook.

Fletcher, the biggest company on the exchange, declined 0.2 percent to $9.13 having rallied into the end of the month yesterday, helping push the NZX 50 to the highest since 2007. Telecom, the biggest phone company on the benchmark index, dropped 2.1 percent to $2.37.

“A lot of stocks were pushed to recent highs” with the month end yesterday, said Karl Williscroft, a broker at Direct Broking. China’s PMI, while still in positive territory above 50, had people “accepting it’s not going to grow at rates that might have been.”

He said as the New Zealand earnings season winds down, the overall message has been “cautious optimism. There’s not exuberance out there.”

Xero, the cloud-based accounting service, rose 3.3 percent to $7.90, a record high close and the biggest gainer on the NZX 50. The stock is up 147 percent in the past 12 months.

NZ Oil & Gas fell 1.1 percent to 92 cents after posting a $7.7 million first-half profit, up from $1.7 million a year earlier, when it took a $6 million hit from writedowns on its investment in the Pike River coal mine. The results did include a $6.5 million writedown of its development in the Cosmos South oil field, offshore Tunisia.

Diligent Board member Services, which sells software allowing company directors to manage their work flow, fell about 1 percent to $5.20. After the close of trading the company posted a 143 percent jump in full-year revenue to $43.7 million while profit soared 177 percent to $9.1 million. The shares have gained 94 percent in the past 12 months.

Postie Plus Group, which last year avoided breaching its banking covenants, tumbled 25 percent to 18 cents. The retailer is in talks with its banks again after posting a wider first-half on dwindling sales and thinner margins and bracing for an annual loss.

Rakon fell 4.6 percent to a record low 21 cents. This month the manufacturer cut its annual earnings guidance for the second time since December, blaming increasing price competition in the smart device market.

(BusinessDesk)

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