MARKET CLOSE: NZ shares join Asia-wide rout; Chorus, Diligent, Westpac drop
June 20 (BusinessDesk) – New Zealand shares fell, joining an Asia-wide rout after the Federal Reserve signalled an end to bond buying, weak Chinese manufacturing figures and economic growth at home that missed expectations. Chorus, Diligent Board Member Services and Westpac Banking Corp paced the slide.
The NZX 50 Index fell 49.62 points, or 1.1 percent, to 4395.93. Within the index, 39 stocks dropped, eight rose and three were unchanged. Turnover was $108 million.
Chorus, the network company spun off from Telecom in 2011, dropped 5.2 percent $2.36 and has fallen 15 percent this year amid uncertainty about regulation governing its access charges. Fletcher Building fell 1.3 percent to $8.15.
Westpac fell 4.4 percent to $33.20, Australia & New Zealand Banking Group dropped 3.4 percent to $33.50 and AMP declined 3.3 percent to $5.80 as the S&P/ASX 200 Index shed 2.2 percent. All major equity benchmarks across Asia fell, following declines on Wall Street.
“We got barbequed by Big Ben,” said Shane Solly, head of equities at Mint Asset Management, referring to Federal Reserve chairman Ben Bernanke’s comments.
Taken together with the unofficial PMI pointing to a contracting Chinese manufacturing sector, “the exuberance of a few weeks ago is gone,” he said. “Overinflated stock prices have been stripped out.”
Diligent, which had climbed 46 percent this year, fell 5.3 percent to $7.55 after the company said today that it incorrectly recognised revenue from new customer agreements and upgrades. The error didn’t affect overall revenue though the disclosure is the latest in a series of missteps.
Diligent has had “an unfortunate series of misadventures,” Solly said. That is hopefully at an end as the company’s new chief financial officer helps put the accounts into place.
OceanaGold, the operator of the Macraes gold field, fell 12 percent to $1.60 as spot gold fell to a month low on the outlook for a tapering in Fed stimulus.
Sky Network Television declined about 3 percent to $5.25, adding to the previous day’s slide when a rival group emerged with rights to English Premier League football rights. Solly said the situation showed rivals could get access to content under current regulation and Sky was likely to recover, given its strong management team.
Fisher & Paykel Healthcare, which gets more than 50 percent of its sales in US dollars, rose 2.4 percent to $3.42 as the kiwi dollar fell to about 78.50 US cents.
Postie Plus Group sank 25 percent to 12 cents a day after appointing Hamish Stevens to its board as an independent director. The clothing chain has been under pressure this year as it works through major issues with its outsourced distribution centre.
Energy Mad dropped 16 percent to 31 cents after the energy efficient lightbulb maker yesterday said it sold its 20 percent stake in a Chinese factory to its partner for about $1.7 million.
Units in the Fonterra Shareholders’ Fund fell 0.7 percent to $7.18 after government figures showed a shrinking primary sector trimmed economic growth in the first quarter due to the widespread drought. Rural services firm PGG Wrightson was unchanged at 30 cents.
Delegat’s gained 1 percent to $4.05 after the winemaker completed its acquisition of the Barossa Valley Estate assets for A$24.1 million. That was slightly below the A$24.7 million initially flagged due to inventory adjustments.
MightyRiverPower fell 1.7 percent to $2.26, back to a record low, despite a Forsyth Barr report earlier this week recommending shareholders hold the shares. Government figures today showed the electricity, gas, water and waste services sector shrank 4.4 percent in the first quarter as declining metal production manufacturing sapped electricity generation. Contact Energy fell 1.2 percent to $5.03 and TrustPower gained 0.1 percent to $7.07.