MARKET CLOSE: NZ shares fall; SkyCity, Telecom drop

MARKET CLOSE: NZ shares fall; SkyCity drops on convention centre probe

June 13 (BusinessDesk) – New Zealand shares fell, pushing the NZX 50 Index to a three-month low, after the Auditor-General announced an inquiry into Sky City Entertainment Group’s bid to build a convention centre and Restaurant Brands shed its dividend.

The NZX 50 fell 43.86 points, or 1.3 percent, to 3381.73. Within the index, 27 stocks fell, 12 rose and 11 were unchanged. Turnover was $103 million.

SkyCity, the Auckland-based casino and hotel company, fell 3.4 percent to $3.41 after deputy auditor-general Phillippa Smith said her office will investigate how SkyCity’s proposal to build a convention centre in Auckland in exchange for more pokie machines was chosen as the best option for the government. The arrangement was criticised as a back-room deal by opposition parties.

“That is creating a bit of uncertainty and weighing heavily on the stock,” said Michael Milne, investment adviser at Craigs Investment Partners. “The more it is brought to the fore and seen in the media the worse it will get for the shares performance”

Restaurant Brands, the fast food franchise operator, fell 4.2 percent to $2.06 after going ex its 9.5 cents final dividend. Tower, which will pay an interim dividend of 5 cents to shareholders on the register as at June 15, dropped 4.8 percent to $1.59.

OceanaGold, which operates the Macraes gold field, rose 2.7 percent to $2.67 and was the biggest gainer on the NZX 50, having seesawed with the price of gold. The spot gold price was recently quoted at US$1609.19 an ounce, up from US$1,538 in mid-May.

Ebos, which distributes medical supplies and pet food, rose 0.7 percent to $7.60 and has gained 26 percent in the past six months. The stock has a dividend yield of 6.3 percent.

“They pay a good dividend and it’s another way to play the expose to an ageing demographic,” Milne said.

Ebos has entered into a new finance facility with ANZ National Bank and Bank of New Zealand worth $135 million, smaller than the $145 million it had flagged.

Fletcher Building fell 2.4 percent to $6.13, leading declines among the biggest stocks on the bourse. Telecom, the biggest company on the NZX 50, fell 2.3 percent to $2.33 and Contact Energy declined 1.9 percent to $4.62.

Chorus, the network company spun off from Telecom in November, fell 2.3 percent to $3.03.

Trade Me, the auction website, fell 2.9 percent to $3.65, the second daily decline after its parent, Australia’s Fairfax Media, issued a profit warning.

Heartland New Zealand was unchanged at 52 cents after the building society named Simon Owen as chief financial officer, replacing Sean Kam. Owen had been deputy CFO. The company also announced two new positions had been filled - head of operational risk & control and treasurer.

Carpet maker Cavalier rose 1.8 percent to $1.71 and Nuplex Industries gained 1.6 percent to $2.49.

(BusinessDesk)

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