MARKET CLOSE: NZ shares fall with Tower, Diligent; Chorus, Abano rally
Aug 7 (BusinessDesk) – New Zealand shares fell, led by Tower and Diligent Board Members Services as the insurer flagged
new capital requirements and the IT firm continued to sink in the wake of its revenue restatements.
The NZX 50 Index declined 27.197 points, or 0.6 percent, to 4548.304. Within the index, 28 stocks fell, 11 rose and 11
were unchanged. Turnover was $106.9 million, including $20 million of Chorus.
Tower declined 2.7 percent to $1.80 following the insurer’s announcement yesterday that it may be required to hold more
capital. Diligent dropped 6.9 percent to $5.40, extending its slide since announcing it will restate revenue from recent
years, the latest in a series of administrative hiccups.
“Investor confidence has been waning with every report being negative,” said Grant Williamson, a director at Hamilton
Chorus rose 4.5 percent to $3.03 after Communications Minister Amy Adams proposed a more favourable regime for Chorus to
operate and upgrade its networks and build a fibre infrastructure. Adams’ proposal will still cut the regulated price
Chorus and charge for network access on the copper lines but not as steeply as the regulator had originally suggested.
“What the government came out with was very much as a lot of us expected,” Williamson said. “To build infrastructure you
need some guarantees around what you can charge for that. If you can’t get an economic return of it then no-one is going
to build it.”
Telecom, which would be among Chorus customers charged more, fell 2.2 percent to $2.26.
Fonterra Shareholders’ Fund rose 1.2 percent to $7.03 as the dairy company made progress in containing three batches of
contaminated whey powder.
“We would hope there was a bit of a learning experience here” for Fonterra, Williamson said. “The way Fonterra has
handled it has not been that good.”
Fletcher Building fell 0.6 percent to $8.37
Shares in Abano Healthcare surged 13 percent to $6.60 after the specialty health clinic investor batted off an offer to
buy it, and now faces a full takeover proposal. The company said it received and rejected an unsolicited non-binding
indicative offer north of $100 million from a third party seeking to invest and operate in the Australasian dental
Contract labour company AWF Group gained 1.7 percent to $3.05 after government figures showed workforce participation
rate increased in the June quarter in another sign of an improving jobs market.
Postie Plus fell 3.2 percent to 15 cents after yesterday saying it plans to raise capital or repay debt in the face of
more disappointing sales. The clothing chain this week named No 1 Shoes executive Richard Binns as its new chief
executive, effective from next month.
Kiwi Income Property Trust, whose earthquake-strengthening of Wellington’s Majestic Tower has been more costly than
expected, was unchanged at $1.15 after Building Minister Maurice Williamson granted building owners more time to
strengthen or demolish earthquake-prone buildings.
Argosy Property fell 0.5 percent to 98 cents, DNZ Property Fund was unchanged at $1.65 and Precinct Properties dropped 2
percent to $1.005.