MARKET CLOSE: NZ shares fall on China data; Fletcher, Xero decline
By Suze Metherell
March 14 (BusinessDesk) – New Zealand stocks fell, joining a global sell off amid concern about a slowdown in China,
Asia’s largest economy, after weaker than expected retail sales data. Xero and Fletcher Building paced the decline.
The NZX 50 Index fell 32.66 points, or 0.6 percent, to 5079.324. Within the index, 26 stocks fell, 14 rose and 10 were
unchanged. Turnover was $108 million.
Markets across Asia declined after reports showed Chinese retail sales grew at the lowest rate in January and February
since 2004, and in the same period factory output increased at its slowest pace since the global financial crisis. In
the past two weeks Chinese company bond defaults and an 18 percent drop in Chinese exports have spooked investors in
what is already deemed an “over-priced” equity market.
“I wouldn’t say the markets are cheap by any stretch of the imagination - in fact some of them are stretching the band
in terms of valuation,” said David Price, a broker with Forsyth Barr. “We’re getting into overvalued territory, and if
it’s looking for an excuse for profit taking it will take it, and that’s what happened.”
Xero, the software company which gained 291 percent in the past year, dropped 2.4 percent to $41.94. Diligent Board
Member Services, the governance app company, declined 0.2 percent to $4.60. Fletcher, New Zealand’s largest listed
company, fell 1.5 percent to $9.58. Tower Insurance was the benchmark index’s worst performer, sliding 2.5 percent to
$1.58.
Investors sold off energy stocks as they made room in their portfolios for Genesis Energy, the last asset to be sold in
the government’s partial privatisation scheme, which has “a very big yield”, said Price.
Government-controlled MightyRiverPower slipped 0.5 percent to $2.025. Meridian Energy declined 0.5 percent to$1.08.
Contact Energy sank 1.7 percent to $5.22.
Retails stocks also declined. Warehouse Group, New Zealand’s largest listed retailer, fell 0.3 percent to $3.22. Outdoor
goods retailer Kathmandu Holdings dropped 2.2 percent to $3.52. Online auction site Trade Me Group declined 1.3 percent
to $3.67. Clothing chain Hallenstein Glasson, which has been the benchmark index’s worst performer this year, rose 1.6
percent to $3.14.
Chorus, the telecommunications network operator and builder, rose 1.5 percent to $1.675. The company’s stock has
declined 43 percent in the past 52 weeks amid concern about the impact of regulated price cuts on its copper network.
Auckland International Airport was unchanged at $3.90 as was SkyCity Entertainment Group at $3.94. Air New Zealand
dropped 1.1 percent to $1.86. Sky Network Television declined 1.1 percent to $6.28. Telecom was unchanged at $2.45.
Outside the index, security analytics software company Wynyard Group rose 4.6 percent to $2.99. The Auckland-based
company raised $30 million in a placement to drive growth plans and will seek a further $5 million in a share purchase
plan from existing investors.
(BusinessDesk)