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MARKET CLOSE: NZ shares fall ahead of MRP sale close

MARKET CLOSE: NZ shares fall ahead of MRP sale close; Skellerup drops on guidance

May 2 (BusinessDesk) – New Zealand shares fell ahead of the close of the MightyRiverPower offer as investors free up funds to participate in the government sale. Skellerup Holdings dropped after cutting its annual profit guidance a second time.

The NZX 50 Index dropped 28.55 points, or 0.6 percent, to 4574.46. Within the index, 31 stocks fell, 12 rose and seven were unchanged. Turnover was $149.5 million.

Stocks were generally weaker across Asia, with the Nikkei 225 Index down 1 percent, after a second reading on China’s HSBC Flash PMI came in weaker.

Skellerup, the industrial rubber goods maker, tumbled 10 percent to $1.33 after saying net profit would be $17 million in the year ended June 30, from a $20 million forecast in February, because drought had hurt local demand and North American and European sales were tracking below forecast.

“Whilst the very recent rain is a welcome relief for our customers and Skellerup, we will not fully recover the deferred sales within the current financial year as farmers will delay some of their buying till the new season,” chief executive David Mair said.

Diligent Board Member Services fell 6.1 percent to $6.81 and Xero declined 6 percent to $12.50 as the two tech darlings extended their retreat from record highs.

Fisher & Paykel Healthcare declined about 3 percent to $2.61 and SkyCity Entertainment Group fell 2.9 percent to $4.40. Sky Network Television fell 2.2 percent to $5.67.

Kathmandu, the outdoor equipment chain, rose 9.4 percent to $2.69, adding to its 9.3 percent jump yesterday, when the company said sales rose 13 percent to $89.7 million in the 13 weeks ended April 28, maintaining the momentum in revenue growth from the first half of the financial year.

Ryman Healthcare, the retirement village operator that has recorded a decade of profit growth, rose 4.3 percent to a record $6.26.

“We are seeing increased interest from overseas investors as Ryman builds its first village in Australia and appoints its first Australian director,” said James Schofield, vice president, equity research, at First NZ Capital. “As baby boomers retire, Ryman will benefit from demographic trends on both sides of the Tasman.”

Rival retirement village company Summerset Group gained 1.3 percent to $3.20.

TrustPower rose 2.7 percent to $6.26 and Contact Energy gained 0.4 percent to $5.27 after business lobbyists called on the opposition Labour and Green parties to abandon a policy to regulate electricity.

(BusinessDesk)

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