MARKET CLOSE: NZ shares mixed as Chorus rebounds
MARKET CLOSE: NZ shares mixed as Chorus rebounds, Hallenstein drops
By Tina Morrison
Dec. 13 (BusinessDesk) - New Zealand shares were mixed in pre-Christmas trading as network operator Chorus continued its rebound and clothing chain Hallenstein Glasson Holdings closed at a two-year low after warning that earnings were under threat from internet rivals.
The NZX 50 advanced 8.861 points, or 0.2 percent, to 4,717.059. Within the index, 27 stocks rose, 11 fell and 12 were unchanged. Turnover was $199.9 million.
Chorus was the top performer on the benchmark today, rising 7.3 percent to $1.47, its fourth straight gain, having touched a record-low close of $1.305 on Dec. 9 amid concern about the impact of regulated price cuts on its copper network. MightyRiverPower rose 2.5 percent to $2.05, following fellow power companies Meridian Energy and Contact Energy which have rebounded after the sector was hurt by the threat of regulatory change.
“Chorus is continuing a bit of a relief rally as people are taking a punt that all will be good in the long term,” said Bryon Burke, head of equities at Craigs Investment Partners.
Milford Asset Management yesterday said the regulatory uncertainty hanging over the network operator was fully priced in, and the investment arm of the Accident Compensation Corp was also attracted back into the stock, lifting its holding in the telecommunications company.
“When a high profile investor is buying in and taking a punt, that is enough to add buying support and change sentiment a little bit as well,” Burke said. “The price deserved to be sold down because they are potentially in trouble.”
Clothing chain Hallenstein Glasson Holdings was the worst performer on the benchmark, dropping 6.5 percent to $3.46, its lowest close in two years. The company told shareholders at its annual meeting yesterday that it may have to cut its profit guidance further if sales don’t improve in the summer season as it faces increased competition from internet rivals overseas.
“Retail is hard,” and clothing is being treated as a “generic good” that can be bought from the internet just like a CD, said Burke.
The Fonterra Shareholders’ Fund edged up 0.7 percent to $5.68, having touching an intraday low of $5.49 this week when Fonterra Cooperative Group slashed its dividend and earnings forecasts. Perpetual, the largest unitholder with 14.3 percent of the fund, said it was prepared to ride out some short-term pain in the expectation the world’s largest dairy exporter will produce better returns a few years down the track.
“It’s a bit more of a steadying of the ship there while people come to terms with the fact that they are going to have a lot less dividends than they thought they would get,” Burke said.