MARKET CLOSE: NZ shares fall on profit warnings; King Salmon flounders
By Paul McBeth
May 1 (BusinessDesk) - New Zealand shares sank as muted earnings guidance from SkyCity Entertainment Group and A2 Milk
didn't meet investors' expectations. New Zealand King Salmon shed almost a fifth of its value as warmer water left it
with more dead fish.
The S/NZX 50 Index dropped 47.41 points, or 0.5 percent, to 9,966.42. Within the index, 24 stocks fell, 16 rose, and 10 were
unchanged. Turnover was $90.9 million.
SkyCity led the benchmark index lower, down 4.9 percent at $3.88 on a volume of 1.4 million shares, more than twice its
617,000 three-month average. The casino operator lowered its annual guidance on weaker-than-expected trading.
Meanwhile, A2 Milk fell 2.2 percent to $16.41 on a volume of 1.1 million shares, after reporting a small acceleration in
sales growth for the nine months through March.
"Despite the reasonably positive leads from global markets, and good performance in Australian trading, we're off half a
percent," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It's not unexpected when you
get a few pieces of negative news."
Lister said SkyCity was a little bit softer than predicted, whereas A2 was in line with projections. Investors may have
wanted to see something new, given A2 is up 46 percent so far this year.
Outside the benchmark index, King Salmon sank 18 percent to $2.45 after warning that warm water had increased its fish
mortality rate, meaning its harvest would be smaller than expected for the next two seasons.
"It's another reflection of the risks around some of the agribusinesses, whether it's Comvita or Scales - you can't
ignore the risks that are beyond your control," Lister said. Comvita increased 1.9 percent to $4.24 while Scales was
unchanged at $4.98.
Z Energy fell 1.9 percent to $6.21 ahead of its annual result tomorrow.
Lister doesn't expect the upcoming reporting season to differ much from the February results.
Sky Network Television was the most active stock with 2 million shares changing hands, compared to its 1.2 million
90-day average. It fell 0.8 percent to $1.21, a record low close. Spark New Zealand traded on just 1.1 million shares,
well short of its 5.8 million average, and was unchanged at $3.67.
Ebos Group gained 0.4 percent at $21.50 when it resumed trading after a halt for a discounted institutional placement.
The New Zealand Shareholders' Association criticised the placement for ignoring retail investors and questioned whether
an underwrite was needed when it was able to raise more funds than initially sought.
Australia & New Zealand Banking Group posted the biggest gain on the day, up 3.3 percent at $29.68, although just 29,000 of the
dual-listed shares traded locally. ANZ reported a 5 percent decline in first-half profit, including compensation for bad
behaviour identified in the Australian royal commission. Its New Zealand unit reported a 4 percent decline in local
profit.
National Australia Bank and its local subsidiary Bank of New Zealand report tomorrow, and Westpac Banking Corp on
Monday. NAB isn't listed in New Zealand, although BNZ has some locally listed bonds. Westpac's dual-listed shares rose 2
percent to $29.73.
Chorus gained 3.2 percent to $6.18 on a volume of 344,000 shares, down on its 537,000 average.
(BusinessDesk)