MARKET CLOSE: NZ shares join global selloff

MARKET CLOSE: NZ shares join global selloff by investors rattled by Greek debt impasse

By Jonathan Underhill

June 29 (BusinessDesk) - New Zealand shares fell, pushing the benchmark index to a five-month low, as the local bourse joined a global sell-off as talks to resolve the Greek debt crisis failed over the weekend. Pacific Edge, Xero and Air New Zealand led a broad-based decline.

The S&P/NZX 50 Index fell 49.63 points, or 0.9 percent, to 5705.81. Within the index, 42 stocks fell, five rose and two were unchanged. Turnover was $91.5 million.

Japan’s Nikkei 225 Index, Hong Kong’s Hang Seng and Australia’s S&P/ASX 200 Index all shed more than 2 percent in Monday trading, as Asia became the first region to react to the weekend’s failed rescue talks. Greek PM Tsipras declared a bank holiday and capital controls on withdrawals, ending a run on the country’s lenders. He failed to win creditor support for enough time to hold a referendum.

“We don’t know if there will be a last-minute reprieve – people were ever-hopeful” said Rickey Ward, New Zealand equities manager at JBWere New Zealand. “But it is becoming increasingly there will be pain whatever the outcome.”

Markets dislike uncertainty and the size of the selloff in equity markets “is a reflection also that markets are trading on historically high premiums and not priced for any disappointments,” Ward said.

Xero, the cloud-based accounting software company, dropped about 4 percent to $18.05, the lowest level since late February. Pacific Edge, which markets a test for bladder cancer, declined 3.2 percent to 61 cents. Metlifecare, the retirement village operator, fell 3.2 percent to $4.60.

Genesis Energy fell 0.6 percent to $1.74. The country’s biggest energy retailer said today it will permanently retire a coal/gas fired unit at the Huntly Power Station which has been in storage as renewable and thermal generation provide more than enough electricity to meet customer demand.

Among the other energy companies, MightyRiverPower gained 1.9 percent to $2.69 and Meridian Energy rose 2.9 percent to $2.165.

JBWere’s Ward said companies with guaranteed local income in New Zealand, a “defensive-type” market, may benefit as investors flee riskier assets.

Skellerup Holdings, which makes rubber goods and equipment for the dairy industry, rose 1.5 percent to $1.32.

Fletcher Building declined 0.7 percent to $8.09 and Spark New Zealand fell 0.7 percent to $2.78. Auckland International Airport, the country’s busiest gateway, fell 0.6 percent to $4.93.

Air New Zealand fell 2.5 percent to $2.525, retailer Warehouse Group dropped 2.6 percent to $2.62 and Heartland New Zealand, the Christchurch-based lender, fell 2.5 percent to $1.17.

Australia & New Zealand Banking Group dropped 3 percent to $36 and Westpac Banking Corp shed 2.9 percent to $35.83, tracking declines in stocks listed on the ASX.

SeaDragon, the Omega 3 fish oils company, was unchanged at 1.5 cents, having slumped 32 percent this year. The change-out of the company’s board has continued, with independent director Tim Preston and executive director Ross Keeley saying they won’t stand for re-election at the company’s annual meeting on Aug. 24, while independent director Sean Joyce has resigned, effective from today. The company has flagged it may need to raise more capital.

Pushpay Holdings fell about 1 percent to $4.11. The company has confirmed it is eligible for a $960,000 research and development grant from Callaghan Innovation that will help mobile payments app developer scale up the platform that allows US church congregations to easily make donations.

(BusinessDesk)

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