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MARKET CLOSE: NZ shares fall, led by A2, Kathmandu

MARKET CLOSE: NZ shares fall, led by A2, Kathmandu; Ryman, Stride gain after results

By Sophie Boot

Nov. 23 (BusinessDesk) - New Zealand shares fell, led by A2 Milk and Kathmandu Holdings while Ryman Healthcare and Stride Property Group gained following their results.

The S&P/NZX 50 Index fell 3.04 points, or 0.04 percent, to 8,101.95. Within the index, 22 stocks fell, 20 rose and eight were unchanged. Turnover was $124 million.

A2 Milk led the index lower, dropping 3 percent to $8.43. The stock traded higher earlier in the day, rising over $9, but there was a big swing when the Australian market - where the stock is dual listed - opened in the afternoon, said Grant Davies, investment adviser at Hamilton Hindin Greene.

The shares have risen this week following A2's annual meeting, where the company said revenue and net profit jumped in the first four months of the current financial year as it continues to benefit from strong demand for infant formula.

"There has been a bit of profit-taking, I don't think it's anything to panic about. It's within A2's normal trading range," Davies said. "The results have the market pretty excited on the whole about their prospects."

Kathmandu fell 2.8 percent to $2.42. The outdoor equipment retailer, set to hold its annual meeting on Friday, said this week that first-quarter earnings were up despite sales dipping as it widened margins by selling less discounted stock.

"Most analysts have raised their target price slightly. They're fairly happy with the margins and inventory control," Davies said. "There's just probably some profit taking as well but was a pretty solid update."

Ryman was the best performer, up 2.6 percent to $9.45. The country's biggest retirement village operator and developer boosted first-half profit 8.4 percent to $202.6 million, and lifted its interim dividend, after reaping bigger margins on resales of existing units, even as the broader property market slowed.

The result was underpinned by a 12 percent increase in the sale of existing occupation rights to 394 with a 37 percent gain in the value of those sales to $201.8 million.

Stride Property Group gained 0.6 percent to $1.69. The company, which spun out its retail portfolio into a separately listed vehicle last year, posted a 44 percent gain in first-half profit to $33.3 million as growth in management fees and lower costs made up for a decline in rental income.

Fisher & Paykel Healthcare rose 0.2 percent to $12.62. The shares have dropped 9 percent this week after New Zealand's biggest listed company said it had increased first-half profit 4 percent to $81.3 million, widened its margins, and lifted its forecast for full-year earnings to the top end of its range. Analysts have said the underlying operating results have disappointed the market.

"They have stemmed the bleeding today," Davies said. "The last couple of days, when the Australian market has opened has been when most of the selling has occurred, and that's what happened today. Then it has been a slow recovery."

Outside the benchmark index, AFT Pharmaceuticals was unchanged at $2.46. The company, which manufactures the Maxigesic painkiller, narrowed its first-half loss to $6.9 million and said it is still on track to return to profitability this financial year or the next as it increases the number of markets where its products are sold.


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