MARKET CLOSE: NZ shares fall, paced by Fletcher; Freightways gains
Aug. 12 (BusinessDesk) – New Zealand shares fell, pushing the NZX 50 Index to a month low, on concern Fletcher
Building’s earnings will reflect tough times in Australia. Contact Energy and MightyRiverPower fell as some investors
lightened their holdings ahead of the Meridian Energy float.
The NZX 50 fell 11.343 points, or 0.3 percent, to 4522.299. Within the index, 20 stocks fell, 22 rose and eight were
unchanged. Turnover was a subdued $85 million.
Fletcher, which counts Australia as its biggest market after New Zealand, dropped 1.7 percent to $8.24. Brokerage First
NZ Capital lowered its rating to ‘neutral’ from ‘outperform’, citing its expectation of a shallower recovery in the
Australian building sector and continued headwinds from a high kiwi dollar against its Australian counterpart.
“Maybe some investors are taking profits ahead of reporting season,” said Grant Williamson, a director at Hamilton
Hindin Greene. “I don’t think the market is expecting a wonderful result (from Fletcher) which is putting a bit of
pressure on the stock.”
Fisher & Paykel Healthcare, which gets more than 50 percent of its sales in US dollars, fell 1.1 percent to $3.60, as the kiwi
dollar rose back up above 80 US cents.
Contact Energy declined 1.3 percent to $5.25 and MightyRiverPower dropped 2.2 percent to $2.21 and sunk as low as a
record $2.19 in intraday trading.
“Investors are getting positioned for the next cab off the rank, which is Meridian,” Williamson said. “There are a lot
of investors who don’t want their portfolios too heavily weighted to electricity companies.”
Fonterra Shareholders’ Fund dipped 1.3 percent to $7.10 after Sri Lanka ordered the company to recall two batches of
milk powder that nation said were contaminated with the fertiliser additive DCD, a claim the company has denied.
NZX, the stock market operator, fell 1.5 percent to $1.36, Telecom dropped 0.9 percent to $2.28 and Sky Network
Television fell 0.8 percent to $5.28 amid broad selling across the market.
“With a relatively sluggish economy, investor expectations can’t be too high,” Williamson said of earnings season.
Freightways, New Zealand’s largest listed courier and data management company, rose about 2 percent to $4.10 after
meeting its guidance of a month ago by posting a 6 percent increase in full-year profit before items. It expects similar
gains in 2014 in “a slow growth environment.”
Rickey Ward, head of equities at Tyndall Investment Management, said he was concerned that revenue growth wasn’t being
matched by earnings growth, raising questions about whether the company was leveraged to New Zealand economic growth or
had structural issues relating to a broad decline in mail volumes.
Moa Group fell 1.7 percent to $1.18 after the brewer said it wouldn’t meet its 2014 sales volume target, with the
shortfall likely to be 30 percent below its target of 195,000 cases.
(BusinessDesk)