MARKET CLOSE: NZ shares drop led by Sky TV, Fletcher at 9-year low; Kathmandu, Synlait gain
By Sophie Boot
April 5 (BusinessDesk) - New Zealand shares fell, led by Sky Network Television, Genesis Energy and Fletcher Building
while Kathmandu Holdings and Synlait Milk gained.
The S/NZX 50 Index dropped 34.09 points, or 0.4 percent, to 8,363.99. Within the index, 23 stocks dropped, 21 rose and six
were unchanged. Turnover was $126 million.
David Price, a broker at Forsyth Barr, said some stocks were seeing large swings at the moment but with such low
turnover, little could be read into the moves.
Sky Network Television was the worst performer, down 6 percent to $2.21.
Price said the pay-TV provider's new pricing options, which it introduced in February in an effort to slow an exodus of
customers quitting in favour of cheaper on-demand rivals, will have customers looking at their bills and deciding
whether to spin down - reduce their subscription features and what they pay Sky.
"One of two things will happen: we'll hear nothing until August, and that will be a good sign. Or, we could get an
update before then, because what happens is 90 percent of the people that spin down do it in the first six months. We
just don't know, that's the problem and that's why the stock just wishes-washes around on quite a low volume," Price
said.
Genesis Energy dropped 3.4 percent to $2.305, Fonterra Shareholders' Fund fell 3.2 percent to $5.71, and Mainfreight
declined 2.8 percent to $24.00.
Fletcher Building dropped 0.4 percent to $5.76, the lowest it has closed since March 2009. Price said there were
concerns about the potential for the stock to fall out of the MSCI New Zealand Index at its next rebalancing, to be
replaced by A2 Milk Co. A2 was unchanged today at $12.92.
Kathmandu Holdings was the best performer, up 2.9 percent to $2.50, while Auckland International Airport gained 1.9
percent to $6.36 and New Zealand Refining Co rose 1.7 percent to $2.37.
Synlait Milk gained 1.5 percent to $9.08. It will spend about $18 million to double production of lactoferrin at its
Dunsandel plant after securing a multi-year agreement to supply the high-value milk protein to an unnamed customer.
The dairy company said a demand and supply imbalance "is driving global strengthening of lactoferrin prices and demand
is notably driven from increasing use of lactoferrin in infant formula, particularly in China." It expects to complete
the expansion by October.
Outside the benchmark index, Scott Technology gained 4.5 percent to $3.50. It boosted first-half profit 26 percent to
$3.1 million as demand for the Dunedin-based firm's automation and robotics systems saw it operating near full capacity.
Revenue climbed 19 percent to $67.5 million, helped by international demand for its Bladestop bandsaw safety technology,
and completion of the company's first system design and build in China. Earnings before interest, tax, depreciation and
amortisation climbed 25 percent to $6.4 million, with operating margins widening to 9.5 percent from 9 percent a year
earlier.
(BusinessDesk)