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

 


MARKET CLOSE: NZ stocks fall led by Telecom; Fonterra gains

MARKET CLOSE: NZ stocks fall led by Telecom; Fonterra Fund gains

By Suze Metherell

July 29 (BusinessDesk) - New Zealand shares fell led by Telecom Corp after an analyst's report cut the stock's target price ahead of its name change next week. Units in the Fonterra Shareholders' Fund rose after Fonterra Cooperative Group slashed its forecast milk payout and boosted dividends.

The NZX 50 Index fell 21.586 points, or 0.4 percent to 5165.556. Within the benchmark, 21 stocks fell, 20 rose and nine were unchanged. Turnover was $158.5 million.

Telecom dropped 3.1 percent to $2.85,extending a fall from a six-year high. An analyst who rates Telecom a 'sell' reduced the target price to $2.30 after reviewing the stock today, according to Reuters' data. New Zealand's largest telecommunications provider is due to change its name to Spark next week as it chases earnings growth in a shift away from its traditional bread and butter services to focus on data, mobility and cloud services, and last month soft-launched its internet TV service Lightbox.

"Its seems to be profit taking, mainly on the back of a broker report that has a much lower target price than the current market price," said Grant Williamson, director at Hamilton Hindin Greene. "A number of people quite like the rebranding idea for Telecom but there's a number out there wondering why the company is spending so much money to rebrand."

Units in Fonterra Shareholder's Fund, which give access to the dairy exporter's dividend stream, rose 1.2 percent to $6.07. Fonterra cut its forecast 2015 milk price to $6 a kilogram of milk solids from $7 kgms, citing a decline in global dairy prices in the face of strong global production, a build-up of inventory in China and falling demand in emerging markets. At the same time the company forecast a dividend of 20 cents to 25 cents a share, up from the 10 cents it plans to pay this year.

"It's probably good news for the fund, the potential for higher dividend payouts from the Fonterra Shareholders' Fund," Williamson said. "Overall, there is the possibility demand has levelled off and is starting to decline, and I think Fonterra has made that point where China might be a little bit overstocked, so a little bit of concern in the dairy sector."

A2 Milk Co, which exports infant formula to China, rose 1.6 percent to 64 cents. Outside the benchmark index, Synlait Milk, which processes a2 Milk's formula and also exports to China, fell 0.3 percent to $3.34.

Fletcher Building, New Zealand's largest listed company, dropped 1.6 percent to $9.04. Xero, the cloud-based accounting software firm, slipped 0.8 percent to $26.20.

OceanaGold was the day's best perfomer on the benchmark index rising 4.3 percent to $3.90. The gold miner will report second-quarter earnings this week.

Retirement village operators rose after recent selling pressure made their lower prices more attractive to investors, Williamson said. Metlifecare advanced 3.4 percent to $4.33. Summerset Group Holdings climbed 1 percent to $3.15. Ryman Healthcare rose 0.6 percent to $8.09.

Outside the benchmark index, Pumpkin Patch fell 1.3 percent to 37.5 cents, after announcing founder Sally Synnott is retiring from the childrenswear retailer's board to be replaced by Griffin's Foods executive Josette Prince as the business continues a strategic review to revive falling sales and profit.

Takeover target Turners Auctions extended yesterday's gain, rising 0.3 percent to $3.06, a premium to the $3 cash, scrip and note offer to buy the auction house by Dorchester Pacific. Dorchester's shares were unchanged at 23.5 cents.

Acurity Health, the private hospital operator, was unchanged at $6.58 after its three biggest shareholders yesterday launched a $6.50 all-cash takeover bid.

Eroad shares were priced at $3, the bottom of the indicative price range, ahead of the logistics and fleet management company listing on the NZX next month.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news