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

 


MARKET CLOSE: NZ shares join global sell off

MARKET CLOSE: NZ shares join global sell off; Gentrack plunges on profit warning

By Suze Metherell

Aug. 1 (BusinessDesk) - New Zealand shares fell, led by Xero, A2 Milk Co and Pacific Edge, joining a global sell off as geopolitical risk spooked investors.

Gentrack Group plunged below its offer price after saying it would miss its prospectus forecast for sales and profit barely a month after its $99 million initial public offering.

The NZX 50 Index shed 58.058 points, or 1.1 percent, to a two-week low of 5109.931. Within the index, 43 stocks fell, three rose and four were unchanged. Turnover was $101 million.

Stocks across Asia followed Wall Street lower, with Japan’s Nikkei 225 index down 0.6 percent in afternoon trading, Australia’s S&P/ASX 200 falling 1.3 percent and Hong Kong’s Hang Seng down 0.5 percent. Overnight the tech-heavy Nasdaq Composite Index plunged 2.1 percent as conflict between Israel and Palestine escalated, investors fretted over the Ukrainian standoff between Russia and the West, and Argentina faced default on its foreign-currency debt.

So-called momentum stocks led the decline on the local bourse. Xero fell 4.4 percent to $24.30. A2 Milk Company shed 3.1 percent to 63 cents. Biotech company Pacific Edge fell 1.3 percent to 75 cents. Diligent Board Members Services dropped 1.5 percent to $4. Outside the benchmark index, Wynyard Group fell 2.4 percent to $2 and SLI Systems fell 2.9 percent to $1.34.

"The geopolitical headwinds in Gaza and also Russia and Ukraine, have been looked past for the last couple of weeks, but the Argentinean default on top of that, I think individually it could be brushed aside by the market," said Greg Smith, head of research at Fat Prophets. "But collectively its resulted in a pull back and risk coming off the table."

Gentrack Group plunged 13 percent to $2.24, falling below its June $2.40 IPO price for the first time. The airport and utility software company said profit in the 12 months ended Sept. 30 is now expected to be $2.5 million to $2.8 million - as much as 32 percent below the $3.7 million forecast in a prospectus first published on May 26, as a customer dispute and a delayed contract upgrade shave up to 6.2 percent off annual sales.

"When you've had a new float, and then disappointed on prospectus forecasts the market is quite scathing," Smith said. "We've had a plethora of floats, and some have held up better than others, but the higher growth plays have potentially a lot more downside."

Kathmandu Holdings led the NZX 50 Index's three gainers, advancing 1.2 percent to $3.37, after the outdoor goods retailer said a cold snap last month in Australia and New Zealand generated more sales than anticipated when the outdoor apparel and equipment retailer announced a profit warning in June. The Christchurch-based company said earnings before interest and tax was $62.5 million to $65.5 million in the year ended July 31, from $63.4 million the year earlier, an improvement from the company's expectation on June 24 that Ebit would likely fall 10 to 15 percent.

Fletcher Building, New Zealand's largest listed company, fell 2.3 percent to $8.91. Air New Zealand, the nation's carrier, 3.8 percent to $1.905.

Argosy Property fell 0.5 percent to $1. The property investor sold its Waitakere Mega Centre in Henderson, Auckland, for the $45.8 million book value as part of its strategy to reduce exposure to retail property.

Outside the benchmark index, Lyttelton Port Co jumped 24 percent to $4.10 after Christchurch City Holdings, the city's infrastructure investment arm, says it will offer to buy the 20 percent of Lyttelton Port it doesn't already own and has a lock-up agreement for Port Otago's 15.5 percent holding.

A formal takeover offer at $3.95 a share, with the promise of a special 20 cent dividend, is likely to be made next week, the CCH said. On completion the port company would be delisted.

Pumpkin Patch jumped 11 percent to a three-week high of 41 cents after the childrenswear retailer said it had renewed a $75 million banking facilities with ANZ.

Hellaby Holdings rose 1 percent to $2.83, after the diversified investment company said it take a $26.9 million impairment against its 2014 earnings to write off goodwill on its shoe stores Hannahs and Number One Shoes, after two years of poor performance. The Christchurch-based company said earnings before interest and tax was $62.5 million to $65.5 million in the year ended July 31, from $63.4 million the year earlier.

(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