MARKET CLOSE: NZ shares fall as political polls weigh on utilities
By Paul McBeth
Aug. 18 (BusinessDesk) - New Zealand shares fell, paced by power companies, as political polls showing declining support
weigh on regulated utilities in a thinly traded market.
The NZX 50 Index fell 6.962 points, or 0.1 percent, to 5071.119. Within the index, 25 stocks fell, 20 gained, and five
were unchanged. Turnover was a smaller-than-usual $85.1 million.
Power companies gained nothing from strong results announced today by Contact and Meridian Energy, as recent political
polls showed reduced support for the incumbent National-led administration. Power companies have been buoyed by support
for the current government, as the Opposition parties have promised to overhaul the electricity market with a central
buying agency.
Contact Energy shares were unchanged at $5.47 after the electricity retailer reported an 18 percent increase in annual
profit to $234 million, hiked its dividend for a second year in a row and spoke openly about the potential for a capital
return to shareholders. Meridian instalment receipts fell 0.8 percent to $1.275 after the state-controlled power company
beat its prospectus forecast with a 22 percent drop in annual earnings to $229.8 million.
MightyRiverPower fell 0.6 percent to $2.37, Genesis Energy declined 1.4 percent to $1.80, and TrustPower decreased 0.7
percent to $7.05.
"The political landscape is a little more fluid with some of the polling looking not totally in National's favour," said
Shane Solly, director at Harbour Asset Management. "This sector and utilities have benefited from National looking like
being re-elected."
Solly said the big earnings day, which also included Freightways, meant trading was lighter than usual as analysts pored
over the reports.
"In the reporting season to date it's been relatively solid. We've seen more companies with earnings meeting
expectations and some modest upgrades," he said.
Shares of Freightways gained 4.5 percent to a six-week high of $5.12 after it lifted profit excluding one-time items by
12 percent to $43 million in the 12 months ended June 30.
Outside the NZX 50, Opus International Consultants dropped 6.6 percent to $1.70 after the engineering firm increased
first-half profit 6 percent to $9.9 million, just shy of First NZ Capital's forecast $10 million.
A2 Milk Co led the benchmark lower, falling 3 percent to 65 cents. Retirement village operator Summerset Holdings fell
2.4 percent to $2.81. Rival Ryman Healthcare fell 1.2 percent to $7.66, and Metlifecare was unchanged at $4.28.
Spark, formerly Telecom, fell 2.1 percent to $2.82 and Fletcher Building increased 0.2 percent to $9.05.
Xero led gainers on the day, up 5.6 percent to $21.30. Shares of the software developer plunged to a 10-month low last
week as investors questioned the company's US growth aspirations. Guinness Peat Group gained 1.7 percent to 60, having
fallen 16 percent through the latter half of last week after saying it was still grappling with its UK pension
liability.
Hallenstein Glasson was unchanged at $3.05 after the clothing chain warned annual profit fell 25 percent, with a
stronger second half failing to turn around a weak first six months of the financial year.
Shares of Lateral Corp closed the day at 20 cents after the mobile payments firm joined the NZX's small-cap Alternative
Market in a compliance listing.
(BusinessDesk)