MARKET CLOSE: NZ shares fall on Greek worries; A2, Xero, Fletcher decline
By Suze Metherell
July 3 (BusinessDesk) - New Zealand shares fell as uncertainty over Greece's debt default sapped risk appetite and
demand for equities. A2 Milk Co, Xero and Fletcher Building declined. Pumpkin Patch sank to a record low.
The S/NZX 50 Index fell 0.58 points, or 0.01 percent, to 5840.89. Within the index, 26 stocks fell, 16 rose and eight were
unchanged. Turnover was $165 million.
Investors grew cautious ahead of Greece's referendum on whether to accept a proposed bailout deal from creditors. New
Zealand stocks fell in a broad-based sell off. A2 Milk, the milk marketing company, led the benchmark index lower,
falling 3.9 percent to 75 cents. Xero, the cloud-based accounting software firm, dropped 0.7 percent to $18.55.
Fletcher, the construction and building supplies firm, declined 1.1 percent to $8.07.
"In terms of Greece what the market is looking for is just some sort of certainty of where it's going. It's a lot of
guesswork at the moment of what the ramification of a yes or no vote might bring about," said Robert Garden, investment
adviser at Craigs Investment Partners. "Valuations are looking a wee bit stretched and with what's happened at the
moment it has given investors a reason to park up and sit on the sidelines for a bit until it washes through."
Outside the benchmark index, Pumpkin Patch dropped 13 percent to 16.8 cents. The ailing children's clothing retailer
expects earnings next year will be "significantly below" this year amid increasingly challenging international wholesale
markets and adverse forecast currency impacts. The Auckland-based company affirmed expectations for normalised earnings
before interest, tax, depreciation and amortisation to be about $14 million in the year ending July 31, in line with
earnings a year earlier, which it said would lead to a "modest" after-tax loss.
"It's not going to get any better," Garden said. "It's just a continuation of the deterioration there for Pumpkin
Patch."
Weakness across the Tasman, where the S/ASX 200 Index was down 0.9 percent in afternoon trading, flowed through to dual listed stocks, Garden said. Australia
and New Zealand Banking Group fell 2.1 percent to $36.78. Westpac Banking Corp declined 1.8 percent to $37. Kathmandu
Holdings, the outdoor goods retailer under offer from Briscoe Group, slipped 1.2 percent to $1.72.
NZX fell 0.9 percent to $1.07. The volume and value of trading on New Zealand's stock exchange increased last month, led
by a gain in smaller-value trades.
Spark New Zealand, formerly Telecom Corp, was unchanged at $2.82.
Heartland New Zealand, the Christchurch-based lender, was the best performer on the day up 2.6 percent to $1.20.
(BusinessDesk)