MARKET CLOSE: NZ shares dragged lower by SkyCity

Published: Fri 21 Oct 2016 09:23 PM
MARKET CLOSE: NZ shares dragged lower by SkyCity; Orion, Air NZ rise
By Sophie Boot
Oct. 21 (BusinessDesk) - New Zealand shares were mixed, with the index dragged lower by SkyCity Entertainment Group while Orion Health Group and Kathmandu Holdings rallied.
The S/NZX 50 Index dropped 15.38 points, or 0.2 percent, to 6,958.4. Within the index, 29 stocks rose, 16 fell and five were unchanged. Turnover was $121.6 million.
SkyCity fell 11.9 percent to $3.76, a one-year low. The casino operator posted weaker first-quarter revenue due to lower gaming and high-roller activity in Auckland, difficult trading conditions in Darwin, and the higher level of the kiwi dollar against the Aussie. Interim chief executive John Mortensen has warned there will be a drop in the immediate term in the business it gets from high-rollers following a Chinese government corruption crackdown which has led to detention of 18 Australian Crown casino employees.
"It's not a good start to their financial year, there's a bit of uncertainty as to the Chinese issue which might play on bringing gamblers over," Grant Williamson, director at Hamilton Hindin Greene, said. "It's pretty disappointing for investors and obviously it being one of out larger listed companies that's put a bit of a dent in the market as well."
Z Energy declined 1.7 percent to $8.01 and Fletcher Building dropped 1.7 percent to $9.89.
"Fletcher's also really weighing on the index, some of the blue chip stocks are trading higher but it's put pressure on the downside. It's a real mixed bag today, and there's still a weight of selling in this market," Williamson said.
Orion Health was the best performer on the index, up 3.8 percent to $3.27, while A2 Milk Co rose 3 percent to $2.09 and Kathmandu Holdings gained 2.1 percent to $1.97.
Air New Zealand advanced 1.9 percent to $1.84, and Summerset Group Holdings was up 1.5 percent to $4.68.
Outside the benchmark index, Pumpkin Patch was placed in a trading halt at 6 cents. The embattled childrenswear retailer says there's virtually no value left in its equity after discussions with its bank were unsuccessful. It's been working with its bank over capital constraints, and expects to complete "further work and discussions with relevant stakeholders" in the next few days and will announce that to the market when an outcome is clear, it said.
"It doesn't come as any surprise, it has been on the critical list for quite some time now," Williamson said. "It's very disappointing given it's a very well known brand in New Zealand, almost a riches to rags story. It was a glamour stock and now it's a penny dreadful."
Seeka Kiwifruit Industries was unchanged at $4.55, and has gained 32.2 percent this year. The largest kiwifruit grower in New Zealand and Australia is forecasting up to an 86 percent lift in annual net profit in 2016, and is changing its name to just Seeka.
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