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MARKET CLOSE: NZ shares weaken ahead of Christmas holidays

MARKET CLOSE: NZ shares weaken ahead of Christmas holiday period

By Tina Morrison

Dec. 20 (BusinessDesk) – New Zealand shares weakened ahead of the Christmas holiday period in mixed trading as investors cash up for profits.

The NZX 50 slipped 25.869 points, or 0.55 percent, to 4,681.191. Within the index, 31 stocks fell, 13 rose and six were unchanged. Turnover was $221.9 million.

“Our market has been a little bit disappointing in recent weeks,” said Grant Williamson, a director at Hamilton Hindin Greene. “We are still continuing to languish. We have entered a quiet period leading into Christmas and there is still a bit of profit taking out there as investors want to take a bit of money off the table for the end of the year. It really is a mixed performance but a relatively flat performance overall.”

Investors were attracted to the dividend yield of electricity generators following recent declines in their share price, Williamson said. MightyRiverPower rose 3 percent to $2.06 and Meridian Energy’s instalment receipts gained 5.6 percent to $1.035.

A report that the Service and Food Workers Union and the NZ Nurses Organisation would file applications with the Employment Relations Authority over low pay for aged care workers is unlikely to have a huge bearing on the companies’ performance because they would probably pass on any increased costs to their residents, Williamson said.

Summerset Group Holdings slipped 0.3 percent to $3.23, Metlifecare dropped 0.5 percent to $3.96 and Ryman Healthcare gained 1.4 percent to $7.85.

Smiths City Group rose 1.7 percent to 60 cents after the Christchurch-based retailer boosted first-half profit 13 percent to $1.9 million even as its revenue dipped in the face of a competitive retail environment.

Abano Healthcare Group jumped 5 percent to $6.30 after the healthcare investor reported first-half profit of $2.3 million, at the top of its forecast range, even as a weak Australian dollar trimmed revenue from across the Tasman.

Fletcher Building slipped 1.5 percent to $8.40 after the Commerce Commission said it wouldn’t be prosecuted over Auckland price fixing with Carter Holt Harvey because it had assisted with the investigation.

Fletcher has declined from its highs of $10 in late October on concern about increased regulation and that a higher New Zealand dollar may crimp its Australian earnings, Williamson said.

Veritas Investments was unchanged at $1.29. The company, which bought the Mad Butcher franchisor business in March this year, will spend at least $3.4 million in cash and shares for a half-stake in the meat patty supplier for the local Burger King franchise.

Airwork Holdings advanced 1.1 percent to $2.78 after its debut yesterday. The aviation services specialist is tightly held with interests associated with majority shareholder Hugh Jones holding 61 percent of the stock. That probably means the stock will trade in only light volumes but it is a welcome addition to the market, offering greater diversity, Williamson said.

“It has been a very good year for IPOs and 2014 is looking quite bright on the IPO front as well,” Williamson said. “It’s good to see overall that the New Zealand capital market is growing quite well.”


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