MARKET CLOSE NZ shares as power companies fall amid political uncertainty
By Suze Metherell
May 8 (BusinessDesk) – New Zealand shares fell after a political poll showed dwindling support for the incumbent
National-led administration, and weighing on power companies exposed to regulatory risk under a change of government.
Contact Energy lead the benchmark index lower, as MightyRiverPower, Meridian Energy, and Genesis Energy paced the
decline.
The NZX 50 Index fell 27.716 points, or 0.5 percent, to 5161.41. Within the index, 23 stocks fell, 18 rose and nine were
unchanged. Turnover was $128.2 million.
Shares of power companies declined after a Roy Morgan political poll showed a Labour-Green coalition could win
government in September’s general election. The two opposition parties plan to re-regulate the energy market in a bid to
push down retail prices, a policy which has dampened investors’ interest in the government’s partial privatisation of
state owned energy companies, MRP, Meridian and Genesis.
Contact dropped 3.5 percent to $5.50. Government-controlled MRP fell 1.8 percent to $2.24 and Meridian slid 3.3 percent
to $1.16. Outside the benchmark index, Genesis slipped 1.4 percent to $1.82.
“Any uncertainty in that political area will be seen to be a negative – particularly the energy sector which is a bit of
a political hot potato at the moment,” said Michael Milne, an investment advisor at Craigs Investment Partners. “Those
energy stocks had run up a wee bit on the back of National polling and that latest poll was a wee bit weaker so we have
seen a bit of a sell off.”
TrustPower, the energy company majority-owned by Infratil, rose 1 percent to $7.02 ahead of reporting annual earnings
tomorrow. Infratil, which reports annual earnings next week, fell 0.9 percent to $2.27.
Z Energy, the transport fuel refiner, fell 1.3 percent to $3.83 after boosting underlying earnings 12 percent to $219
million as it widened fuel margins at the expense of market share.
“The headline numbers looked pretty reasonable and their margins looked pretty good,” Milne said. “One of the questions
that’s hung over the business is they’re losing a bit of market share.”
Warehouse, New Zealand’s largest listed retailer, was unchanged at $3.38 after the red sheds company said sales rose 8.6
percent in its third quarter.
Brisbane-based jeweller Michael Hill International declined 2.3 percent to $1.30. Kathmandu Holdings, the outdoor goods
retailer, fell 3.5 percent to $3.86. Trade Me Group, the online auction site, slipped 1.3 percent to $3.95.
Fletcher Building, New Zealand’s largest listed company, fell 0.4 percent to $9.26. A Craigs’ report this week
downgraded its recommendation on the stock to a ‘hold’ from a ‘buy’ on a slower than expected Christchurch rebuild.
Xero, the cloud-based accounting software, fell 0.3 percent to $30.25. Telecom, New Zealand’s largest telecommunications
provider, slipped 0.2 percent to $2.665. Retirement village operator, Ryman Healthcare, dropped 1.1 percent to $8.80.
Diligent Board Member Services lead gainers, up 3.3 percent to $4.41. Sky City Entertainment Group advanced 3.3 percent
to $4.10 and Mainfreight rose 1.5 percent to a record $13.80.
Guinness Peat Group was unchanged at 67.5 cents after its UK threadmaker unit, Coats, said first quarter sales rose 2
percent.
Argosy Property was unchanged at 94.5 cents after the property investor sold an underperforming commercial building in
Auckland for $10.4 million.
Outside the benchmark index, Mercer Group, the stainless steel manufacturer, was unchanged at 17 cents. The company
slashed its full-year forecast earnings before interest tax and amortisation in half after sales were slower than
expected.
Rakon dropped 4.6 percent to 21 cents after the navigation components maker said it would post a bigger annual loss than
expected on asset writedowns and depreciation.
APN News & Media was unchanged at 73 cents after the Australian media group said group earnings were lagging 2013 on flat
advertising spending. The dual-listed stock was down 11 percent to 60.2 Australian cents in afternoon trading on the
ASX.
(BusinessDesk)