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

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news