Wednesday 12 October 2016 05:33 PM
MARKET CLOSE: NZ shares fall along with Asia; Xero and Summerset drop, Air NZ gains
By Sophie Boot
Oct. 12 (BusinessDesk) - New Zealand shares dropped, following regional markets lower, with Xero and Summerset Group
Holdings declining while Air New Zealand and Mainfreight gained.
The S/NZX 50 Index fell 16.78 points, or 0.2 percent, to 7,107.45. Within the index, 24 stocks fell, 15 rose and 11 were
unchanged. Turnover was $136.3 million.
Asian markets followed Wall Street's drop overnight after the US earnings season began with disappointing results. In
afternoon trading, Hong Kong's Hang Seng was down 1.1 percent, Japan's Nikkei 225 had dropped 0.9 percent and
Australia's S/ASX 200 fell 0.4 percent.
"The whole of Asia's trading lower on what was probably a weak start to earnings season in the States which has made
markets a little bit nervous today right across Asia, and we're one of those. All the majors are trading in the red
currently," said Peter McIntyre, investment adviser at Craigs Investment Partners.
Xero led the index lower, down 2.8 percent to $18.17, while Summerset Group Holdings dropped 2.4 percent to $4.84 and
Sky Network Television fell 2.2 percent to $4.88.
Meridian Energy was the best performer on the index, up 2.5 percent to $2.69.
Air New Zealand rose 1.7 percent to $1.80. Within its monthly operating statistics, the airline today said it had sold
its remaining stake in Virgin Australia for A$65.7 million in a series of off-market trades.
"The operating stats generally weren't too bad, they're obviously struggling with the Trans-Tasman route which of those
figures seems to be the standout. Obviously greater competition is impacting on that particular route. All of next
year's earnings are pretty much priced in to the share price currently," McIntyre said.
Mainfreight rose 1.1 percent to $18.20. The transport and logistics group warned investors first-half revenue will be
between $1.15 billion and $1.17 billion, less than was expected, due to falling ocean freight rates hitting billing
levels. The company said results from New Zealand had been stronger than expected, while results in Europe, Australia,
and Asia had improved.
"New Zealand's strong as far as their performance which shouldn't really come as a surprise to anybody, obviously
they've got good GDP numbers coming through and improving results out of Europe and Australia," McIntyre said. "They
seem to be disappointed, obviously it was a beat on the PCP (prior corresponding period) and their shares are trading up
on pretty light volume."
Contact Energy advanced 1.1 percent to $4.79. The electricity and gas provider is turning its focus to reducing debt
after returning $847 million to shareholders over the past two years.
"It was pretty uneventful really, first quarter ebitda (earnings before interest, tax, depreciation and amortisation) is
up and the full-year forecasts are up," McIntyre said. "There were certainly no surprises, no real forecast statement
but it focused on continued cost-cutting and profit generation saying the market's pretty mature."
Chorus gained 0.8 percent to $3.74. The telecommunications network operator announced this morning it had raised 500
million euros in medium-term notes at an interest rate of 1.125 percent per year, set to mature on Oct. 18, 2023.
Outside the benchmark index, Pushpay Holdings dropped 4.4 percent to $2.15. The mobile payments app developer says it
exceeded its guidance for the second quarter of 2017 and is on target to reach its forecast $100 million of annualised
committed monthly revenue by the end of next year.
(BusinessDesk)
ends