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MARKET CLOSE: NZ shares drop as new issues digested

MARKET CLOSE: NZ shares drop as new issues digested; Ebos, Metlifecare fall

June 4 (BusinessDesk) – New Zealand shares fell as the market digested a raft of placements recently from companies including Ebos Group and Metlifecare. Website search company SLI Systems, which listed last week, soared 22 percent.

The NZX 50 Index fell 37.57 points, or 0.8 percent, to 4473.77. Within the index, 29 stocks fell, 12 rose and nine were unchanged. Turnover was $242 million. The benchmark index has declined 4.2 percent since reaching a record high last month as offshore investors took fright at a plunging kiwi dollar.

“We’re seeing a continuation of the trends from last week of offshore investors selling because they are worried about the currency,” said Mark Warminger, a portfolio manager at Milford Asset Management.

“There’s been so many placements recently – MightyRiverPower, Metlifecare, Summerset Group, Ebos – you’re seeing a lot of money from retail investors to fund those deals,” he said. Today’s decline “is certainly not a road-crash. There was always going to be a stage where the market needs a bit of digestion of these deals.”

Ebos dropped 5.6 percent to $10.20, still well above the $8.50 a share placement to raise $90 million that helped fund its $1.1 billion acquisition of the Symbion pharmaceutical wholesaler and distributer in Australia announced last week.

“The Ebos deal has been incredibly well received,” Warminger said.

Metlifecare, the retirement village operator that announced $80 million of capital raising to fund its growth last week, fell 3.4 percent to $3.15.

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MightyRiverPower, which listed on May 10 after the government sold down its stake at $2.50 a share, fell 1.7 percent to $2.36 today.

Summerset declined 0.7 percent to $3.02. The retirement village operator’s major shareholder Quadrant Private Equity sold down its stake in the retirement village operator at $2.90 a share this month, which saw 30.7 million shares change hands.

SLI Systems rose 40 cents to $2.18. The provider of internet search software listed on May 31, having sold in an IPO at $1.50 apiece.

Xero, the cloud-based accounting company targeting small and medium-sized businesses in a global push, edged up 0.1 percent to $14.01. That was enough to make it the highest-priced local stock on the NZX, after Port of Tauranga fell 4.1 percent to $13.70.

The two dual-listed Australian banks remain the highest-prices stocks overall on the NZXZ. Westpac Banking Corp climbed 1.9 percent to $35 and Australia & New Zealand Banking Group rose 2.5 percent to $33.96.

Kathmandu, the outdoor equipment chain, fell 6.7 percent to $2.66. The stock sheds its 3 cent interim dividend tomorrow.

Fletcher Building rose 0.6 percent to $8.42 and Telecom declined 1.7 percent to $2.27.

(BusinessDesk)

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