MARKET CLOSE: NZ shares fall; A2 Milk, TradeMe decline
By Sophie Boot
July 28 (BusinessDesk) - New Zealand shares fell as A2 Milk gave up some of its recent gains while building stocks Fletcher Building and Metro Performance Glass rose.
The S&P/NZX 50 Index dropped 72.21 points, or 0.9 percent, to 7,639.51. Within the index, 33 stocks dropped, 11 rose and six were unchanged. Turnover was $159 million.
"It has been a healthy correction, it was a pretty rough old day but apart from some pockets of volume, the market is pretty quiet," David Price, broker at Forsyth Barr, said. "We're in confession season, next week is the last of it - if there's going to be anything, next week is it."
A2 Milk was the worst performer, down 5.3 percent to $4.28. The stock soared this week, up as high as a record $4.52 yesterday amidst positive sentiment about its upcoming results. Despite today's fall back, it has still gained 10 percent in the week.
"It's on reasonable volume, but there hasn't actually been any company news," Price said. "It is reasonably volatile, volume has been driven predominately out of Australia."
TradeMe fell 1.5 percent to $5.42, Genesis Energy dropped 2.4 percent to $2.43, and Auckland International Airport declined 2.2 percent to $6.80.
Fletcher Building rose 0.8 percent to $7.90. Shares plunged as low as $7.48 last week after the building company downgraded its earnings expectations for the second time and chief executive Mark Adamson left with immediate effect, but have been recovering over the past few sessions.
"There's been inspired buying out of Australia, people look at it on a multiple basis and it's cheap versus an expensive market, and versus Aussie peers, that's where the re-rating has come from," Price said. "That whole sector has been downgraded at a time of expansion - Metro, Steel & Tube, Fletcher Building, Methven, they've all been the same. You've seen, not quite profitless growth but excusing the pun, they've been squeezed at the margin really."
Metro Performance Glass was the best performer, up 3.3 percent to $1.55, while Vital Healthcare Property Trust rose 1.4 percent to $2.25. Outside the benchmark index, Methven rose 1.8 percent to $1.13 and Steel & Tube Holdings dropped 1.8 percent to $2.24.
Blis Technologies dropped 3 percent to 3.2 cents. The Dunedin-based company expects to post a maiden profit in the current financial year as it says it is positioned for sustainable, profitable growth in a rapidly expanding market.
"During this financial year, the company will continue to invest in growth initiatives, delivering increased turnover and a profit," chief executive Brian Watson said in notes prepared for delivery at the annual general meeting in Dunedin today.
Blis had forecast a profit for the 2017 financial year but warned the market in February that pre-tax profit wasn't going to meet the $700,000 forecast due to significant reductions in purchases by three major customers. The stock has shed 35 percent over the past year.