MARKET CLOSE: NZ stocks slip after Manchester concert attack

MARKET CLOSE: NZ stocks slip as Manchester concert attack drags on investor sentiment, Comvita drops

By Rebecca Howard

May 23 (BusinessDesk) - New Zealand stocks dipped, led by Comvita and Spark New Zealand, in cautious trading after a suspected terrorist attack killed at least 19 people and wounded 59 at a pop concert in the English city of Manchester.

The S&P/NZX 50 Index fell 24.80 points, or 0.3 percent, to 7,384.70. Within the index, 18 stocks rose, nine were unchanged and 23 fell. Turnover was a quiet $93.7 million.

"There is very low volume running through the market and Asia, in particular, is trading sideways post the Arianna Grande attack in the UK. Markets are tending to trade a little bit cautiously today, " said Peter McIntyre, an investment adviser at Craigs Investment Partners. Across the Tasman, the S&P/ASX 200 index was 0.2 percent in afternoon trading while Japan's Topix was down 0.1 percent.

Comvita led the local market lower, shedding 6.6 percent to $5.25, a reaching a 10-month low, after Ministry for Primary Industries said the myrtle rust fungal disease was found in Waikato today.

"Investors are concerned about myrtle rust and how it might impact financially on that business, in particular given news reports of new discoveries of the fungal disease. Investors are looking to sell," said McIntyre.

Spark shed 1.9 percent to $3.665 while A2 Milk fell 1.4 percent at $3.44, which McIntyre put down investors booking profit on recent gains in the stock.

Auckland International Airport lost 0.7 percent to $6.89 despite positive passenger numbers. The company said total international passenger numbers, excluding transits, increased by 15 percent to 861,292 in April 2017 from the same month a year earlier. However, news that the transport hub's Chinese visitor arrivals were down 10.1 percent in April 2017, compared with April 2016, may have weighed on sentiment, McIntyre said.

Fisher & Paykel Healthcare shed 0.2 percent to $10.08. Earlier, Macquarie Group lifted its 12-month target price on the stock by 7.3 percent and kept its 'outperform' rating after the company's full-year revenue growth beat expectations and as a weaker New Zealand dollar weighs in the exporter's favour. McIntyre said the stock was weaker on some profit-taking as investors had taken positions ahead of the result.

Ebos Group was the leading gainer adding 1.7 percent to $18.25 after it entered an agreement to acquire HPS, Australia’s largest provider of outsourced pharmacy services to hospitals, for A$154 million. The acquisition is expected to increase Ebos’s underlying earnings before interest, tax, depreciation and amortisation by at least 5 percent in the 2018 financial year and will add to earnings per share from year one, it said in a statement to the New Zealand stock exchange.

"On the surface it looks like a pretty positive acquisition for Ebos and certainly will provide them with some synergy benefits throughout Australasia. The market likes it," said McIntyre.

Serko shares jumped 21 percent to 46 cents after the online travel booking software firm said it boosted sales and scaled back spending, allowing it to almost halve its annual loss and affirm its target of making a profit in 2018.

Chorus also helped shore up the index, adding 1.1 percent to $4.48. McIntyre said the company continues to benefit from its addition to the S&P/ASX 200 index, index-tracking investors have to hold the stock. "They are very bond-like as they pay a good solid income stream to investors," he said, adding there is likely some ongoing buying from institutional investors.

Xero added 1.5 percent to $24 as it moves toward break even. McIntyre noted that the chief executive Rod Drury seems to be giving a series of presentations about the business which is also helping it get some momentum.

Fonterra Shareholders' Fund rose 1.5 percent to $6.13. The dairy giant is expected to publish its final forecast for the season that is just ending as well as its opening forecast for the season that starts on June 1.

(BusinessDesk)

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