MARKET CLOSE: NZ shares fall as A2, Synlait extend slide, F Healthcare rises
By Jonathan Underhill
Nov. 7 (BusinessDesk) - New Zealand shares fell as A2 Milk and Synlait Milk, the best-performing companies on the
benchmark index this year, extended their decline amid speculation investors who enjoyed the run-up are now booking
profits from the gains. Fisher & Paykel Healthcare rose as the kiwi dollar headed into its third week below 70 US cents.
The S/NZX 50 index declined 3.96 points, or 0.1 percent, to 8,049.67. Within the index, 29 stocks fell, 14 rose, and seven
were unchanged. Turnover was $145 million.
The benchmark index has retreated from the record high it reached on Oct. 31 and is now about 1.5 percent below its
peak. Grant Williamson, a director at Hamilton Hindin Greene, said there's "a little bit of nervousness in the market"
pending more detail of the new government's policies.
Retirement village operators "were under a bit of pressure" because of the government's intention to lift the minimum
wage and cool the property market, he said. Metlifecare fell 0.5 percent to $5.64 today, Summerset Group fell 1.5
percent to $4.67 and Ryman Healthcare, which reports its first-half results on Nov. 23, slipped 0.3 percent to $9.20.
Synlait fell 7.4 percent to $7.27 and A2, its infant formula partner, declined 4.5 percent to $7.62. The shares have
soared 135 percent and 259 percent respectively this year.
"There's been a degree of profit taking from investors for a number of days now," Williamson said. "As the prices slip
it could fuel further selling. Both have been overdue for a correction." It was too early to say whether the decline
signalled a change of sentiment toward the companies, he said.
F Healthcare, a key beneficiary of a weaker dollar because it makes most of its sales overseas, gained 2.8 percent to
$13.44 and is edging back toward the record $13.49 it reached late last month.
Fletcher Building fell 1.7 percent to $7.07 and has fallen 32 percent this year, a period in which it has sacked its
chief executive and apologised to shareholders after being unable to control cost blow-outs at two major construction
projects.
Trustpower fell 1.7 percent to $5.87, and Ebos Group fell 1.4 percent to $17.35.
Among gainers, Spark New Zealand rose 2.8 percent to $3.71, Xero rose 1.9 percent to $34.70 and Air New Zealand rose 1.5
percent to $3.37.
Tower fell 2.5 percent to 78.5 cents. The general insurer has terminated a deal that would have seen Suncorp Group's
Vero Insurance take over the New Zealand business but said it is open to renegotiating a new transaction if a High Court
appeal overturns a regulatory block.
New Zealand King Salmon Investments rose 3.1 percent to $2.36. The world's largest aquaculture producer of king salmon
told shareholders at their annual meeting in Blenheim that it is too early to tell whether a new government will affect
its plans to relocate six fish farms to more favourable sites in the Marlborough Sounds. Managing director Grant
Rosewarne said that if some or all of the farms are relocated, the first harvest from those farms would be unlikely to
come before the 2020 financial year.
Evolve Education was unchanged at 78 cents after the company said it is on track to post a first-half profit of $7
million not including a non-recurring expense item of $3 million. At the annual shareholders meeting in August, Evolve
forecast first-half profit of $7 million, down 14 percent from a year earlier.
(BusinessDesk)