MARKET CLOSE: NZ shares fall, Sky TV and FPH drop while Chorus, Arvida rise
By Sophie Boot
Sept. 5 (BusinessDesk) - New Zealand shares fell, led lower by Sky Network Television on continued earnings worries and
Fisher & Paykel Healthcare, while Chorus and Arvida Group gained.
The S/NZX50 Index dropped 64.15 points, or 0.7 percent, to 9,228. Within the index, 22 stocks fell, 20 rose, and eight were
unchanged. Turnover was $137.2 million.
Leading the benchmark index lower was Sky TV, which dropped 3.5 percent to $2.20. The shares have dropped 17 percent
since the company gave its annual earnings report last month.
"That's a continuation of a trend we've seen since they reported, I would say on concern of continued loss of
subscribers, though that's no great news to anybody," said Josh Wilson, principal and senior portfolio manager at
NZFunds. "The way I looked at it was they'd done a really good job at taking costs out of the business, but there's only
so far you can cut costs and if revenues continue to decline and follow the trend that they have been, then earnings
become the meat in the sandwich and will get squeezed."
Fisher & Paykel Healthcare fell 2.7 percent to $15.20. On Monday, it warned the cost of contesting the latest patent allegations
from rival ResMed will cut annual earnings by as much as $10 million in a far-ranging dispute across multiple
jurisdictions.
"It's just part of doing business from here on in, basically," Wilson said. "Fisher & Paykel is fortunate it's not the biggest part of their business, it's not as much of a threat as if it was infringing
around the hospital part of their business. They had a really strong run and this has brought it back to earth a bit."
A2 Milk Co fell 3.3 percent to $12.40 and Auckland International Airport dropped 1.9 percent to $6.99.
Chorus was the best performer, up 2.3 percent to $4.83, while Arvida Group rose 2.3 percent to $1.35 and Metlifecare
gained 1.9 percent to $6.40.
NZFunds' Wilson said much of the focus today had been off-market, with both Steel & Tube Holdings and Oceania Healthcare in trading halts.
Steel & Tube was frozen at $1.23 as it ran a $17.8 million shortfall bookbuild following its deeply discounted 1-for-1.9 pro
rata rights offer, where shareholders bought about $42.3 million of new shares at $1.05.
Oceania Healthcare was stopped at $1.14 as cornerstone shareholder Macquarie Group began selling down some of its
shares. Macquarie intends to sell up to 95 million shares at 79 cents, representing 15.6 percent of the company, and
only part of the 57.2 percent stake it owns. The smaller stake means the Macquarie entity will no longer be able to
control the appointment of any directors to the board.
(BusinessDesk)