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


MARKET CLOSE: NZ shares fall as investors mull gains

MARKET CLOSE: NZ shares fall as investors mull gains; Spark, Air NZ drop

By Suze Metherell

Oct. 3 (BusinessDesk) - New Zealand stocks fell, Spark New Zealand and Air New Zealand declined as investors mulled whether recent gains had made the stocks fully priced. Meridian Energy and Genesis Energy gained as traders were drawn to the relatively high yield of the companies.

The NZX 50 index fell 8.243 points, or 0.2 percent, to 5236.994. Within the index stocks were mixed, 22 fell, 23 rose and five were unchanged. Turnover was $108 million.

Investors are looking for earnings growth to justify the benchmark index's 2.2 percent rise in the September quarter. It outpaced the US Dow Jones Index's 1.3 percent gain, while Australia's S&P/ASX 200 Index declined 1.9 percent and the UK's FTSE Index fell 1.8 percent in the same period.

"On a relative basis New Zealand has performed exceedingly well in the last wee while given the weakness we've seen in Australia, Europe and the US," said David Price, a broker at Forsyth Barr. "We've been saying for a little while that the market has a lot of growth factored into it, and we need to see that come through to support where it currently sits."

Spark, formerly Telecom, which rose to a more than six-year high last month, fell 2.4 percent to $2.905 and has gained 29 percent this year. Air New Zealand, the national carrier, declined 1.3 percent to $1.94 and has gained some 26 percent this year.

Offshore investors have been lured to the local bourse for its relatively high yield while international interest rates remain largely on hold in a bid to stimulate economic recovery. Meanwhile, energy companies have rallied in the lead up to and after the Sept. 20 general election, as it became clear there would be no change in government. Opposition parties had vowed to restructure the sector in a bid to push retail electricity prices down.

Meridian, the state-controlled energy company, was the day's best performer on the benchmark, advancing 3.2 percent to $1.45. Fellow partially-privatised power businesses Genesis climbed 1.3 percent to $1.95 and MightyRiverPower increased 0.4 percent to $2.525. Contact Energy rose 1.4 percent to $5.97.

"It's a market which still yields pretty well on a price to earnings ratio basis. We're not cheap but at the moment if you look at the gentailers the yield on them is pretty good, and that's attractive when you've got interest rates at all-time lows pretty much everywhere," Price said. "Stocks with yields are being relatively well supported."

Fletcher Building, the nation's largest listed company, slipped 0.8 percent to $8.66.

NZX was unchanged at $1.23. The volume of trades on the New Zealand stock exchange fell 4 percent to 103,458 in September from the year earlier month, as an increase in debt trades failed to make up for a decline in equity trading.

Outside the benchmark index, Dorchester Pacific was unchanged at 25 cents. The finance company now controls 50 percent of Turners Group NZ, formerly Turners Auctions, triggering the car auction firm to pay shareholders a special 15 cents per share dividend, an incentive to shareholders to accept Dorchester's takeover offer. Turners rose 0.3 percent to $3.12.

Abano Healthcare was unchanged at $7. The Financial Markets Authority has filed civil proceedings against Australian private equity firm Archer Capital and Abano shareholder Peter Hutson, saying the parties should have notified the market of their deal to act together on a prospective takeover bid earlier than they did.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>


Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>


RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>


ScoopPro: Helping PR Professionals Get More Out Of Scoop has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>