MARKET CLOSE: NZ shares fall, led by A2; Fletcher Building, CBL gain
By Sophie Boot
Nov. 3 (BusinessDesk) - New Zealand shares dropped, led lower again by A2 Milk Co while Fletcher Building and CBL Corp rose.
The S&P/NZX 50 Index fell 17.94 points, or 0.2 percent, to 8,065.12. Within the index, 22 stocks fell, 18 rose and 10 were unchanged. Turnover was $173.3 million.
A2 fell 3.2 percent to $8.15. The stock has bounced around the past two days, falling as low as $7.45 on Wednesday before rising back to $8.42 yesterday, but is still up 295 percent this year.
"A broker downgraded their recommendation two days ago, it's gone up significantly in the last while and pulled back two days ago quite sharply," said Craig Stent, executive director and head of equities at Harbour Asset Management.
"It seems it was a lot of small parcels going through, particularly in Australia, so that tells you that it's more retail-oriented that have been selling it then buying it back yesterday. Outside of that there has been no real news flow. It's only back to where it was at the end of last month, they've done a big round trip."
Spark New Zealand dropped 2 percent to $3.64, Contact Energy fell 1.2 percent to $3.64 and Trade Me Group dipped 1.1 percent to $4.32.
Fletcher Building led the index up, rising 2.6 percent to $7.18. The stock has fallen 34 percent this year.
CBL Corp gained 2 percent to $3.01, having traded as high as 5 percent during the session.
"There was a big line of stock through two or three days ago, and that's been overhanging the market - now that's been cleared, so we're seeing a bit of a pop in the share price today," Stent said. "It has been particularly weak for a while. The other news is that the CFO is resigning, he's there another six months - not that his resignation is the reason they're up 5 percent, but it's another item of news flow."
Outside the benchmark index, Colonial Motor Co rose 0.3 percent to $7.64. The motor vehicle distributor, which listed on the NZ stock exchange in 1962, is cautious about forecasting in the year ahead despite its strong returns in 2017 and continued demand for new vehicles.
At its 99th annual meeting in Wellington this afternoon, chair Jim Gibbons said it was difficult to give accurate forecasts from month to month, let alone six months ahead, but noted the first quarter to Sept. 30 had improved on last year and produced an excellent result.