Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


MARKET CLOSE: NZ stocks drop on plane crash, Gaza invasion

MARKET CLOSE: NZ stocks drop on plane crash, Gaza invasion; Xero, A2, Pacific Edge slide

By Suze Metherell

July 18 (BusinessDesk) - New Zealand stocks fell as in a global sell-off as news of a passenger jet plane shot down over Ukraine and Israel's invasion into Palestine's Gaza strip spooked investors, driving demand for so-called 'safe haven' assets such as gold and bonds. Xero led the market lower, paced by fellow growth stocks.

The NZX 50 Index fell 3.46 points, or 0.1 percent, to 5108.926. Within the index, 24 stocks fell, 20 rose and six were unchanged. Turnover was $111.7 million.

Stocks across Asia followed Wall Street lower after Malaysian Airlines flight MH17 was shot down by suspected pro-Russia Ukrainian militants and Israel launched a ground invasion of Gaza after 10 days of escalating violence.

Local growth stocks led the NZX lower, led by Xero, the cloud-based accounting software, which dropped 4.1 percent to $23.50. Pacific Edge, the Dunedin-based biotech company, declined 4 percent to 72 cents. A2 Milk Co, the milk marketer, fell 3 percent to 65 cents. Diligent Board Members Services, the governance app developer, slid 0.2 percent to $4.10.

Meantime, more defensive companies benefited from the declining risk appetite. Telecom Corp advanced 0.9 percent to $2.80. Goodman Property Trust climbed 0.5 percent to $1.075. Vector, the Auckland lines company, rose 2 percent to $2.56. Meridian Energy increased 0.4 percent to $1.24.

"Markets don't like uncertainty and both of those incidents bring uncertainty, so we saw a sell off across Europe, the UK and the United States overnight and a bit of a flight to safety, so people sold down the higher risk assets, like shares," said Mark Lister, head of private wealth at Craigs Investment Partners. "Because (growth-orientated stocks) are not in profit, as soon as you get a bit of caution creep in the first things people look to sell are the higher risk ones, and they flock to the ones they know and under stand and trust, the boring stocks - the property trusts, the ultility companies, the infrastructure companies."

OceanaGold was the best performer on the benchmark index, up 9.4 percent to $3.73 after the gold spot price jumped on new of the MH17 crash.

Units in Fonterra Shareholders' Fund rose 0.5 percent to $6.01. The High Court agreed with Fonterra Cooperative Group that its dispute with French food group Danone over the botulism false alarm last August should be dealt with in arbitration in Singapore, but won't grant a permanent stay on legal proceedings. The units in the fund give holders access to the company's dividend stream.

Chorus fell 1.8 percent to $1.65. The telecommunications network operator tasked with building the bulk of the nation's ultrafast broadband network has cut a deal with Crown Fibre Holdings to bring forward funding of $178 million though at a high interest rate and the expense of dividends. Last year the Commerce Commission proposed cutting the network operator’s pricing on its copper line services, which Chorus said left a $1 billion hole in the funding for the roll out of the government-sponsored UFB. In March, Crown Fibre gave Chorus greater flexibility in building the network provided it meets the agreed deadline, and has aligned funding with completed work.

Fletcher Building fell 0.2 percent to $8.89. Auckland International Airport slipped 0.1 percent to $3.80.

Outside the benchmark index, Postie Plus Group's administrators announced the ailing retailer had been sold as a going concern for an undisclosed amount to Roan Ltd, a subsidiary of Pepkor, a South African-based investment group with clothing and footwear retail interests in Australia and Eastern Europe. Postie Plus, which will be renamed Retva, shares have been suspended from trading on the NZX since May 29, and last traded on May 27 at 7.3 cents, giving the company prior to the notification that it was going into voluntary administration a value of $2.9 million.

Energy Mad plunged 19 percent to a record low of 15 cents. The energy efficient light bulb maker corrected a Radio New Zealand report that said it will turn a profit in the first half of the fiscal year. The company widened its annual loss to $4.8 million in the year ended March 31, from a loss of $1.3 million the previous year.

Turners Auctions fell 0.4 percent to $2.67. The auction house announced it will change its name to Turner Group, effective August 4.

ERoad, whose products allow transport companies to manage and pay road user charges and keep track of their fleet, lodged a prospectus for an initial public offer with the Companies Office today, with a view to listing on Aug. 15. The Auckland-based company will sell between 13 million and 15.7 million shares at an indicative price range of $3 to $3.80 per share, of which $40 million will be new capital. The price range values the company at between $180 million and $228 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news