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MARKET CLOSE: NZ shares fall as more Commercial Bay delays weigh on Fletcher, Precinct

Thursday 30th May 2019

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New Zealand shares fell, with Fletcher Building and Precinct Properties New Zealand under pressure on news the Commercial Bay development is running behind schedule and facing more cost overruns. 

The S&P/NZX 50 Index decreased 26.85 points, or 0.3 percent, to 10,096.47. Within the index, 26 stocks fell, 20 rose, and four were unchanged. Turnover was $151.4 million. 

Fletcher fell 2.6 percent to $5.30 on a volume of 2.9 million shares, more than twice its 90-day average of 1.2 million. The country's biggest construction firm was under the spotlight again after Precinct warned the Auckland CBD project was set to open six months later than the previous forecast, potentially adding another $10 million to the $690 million development cost.

"Fletcher's been sold off a little bit today, which is probably a sign of investors reaching exhaustion with this poor update," said Grant Davies, an investment adviser at Hamilton Hindin Greene. Precinct dropped 3 percent to $1.61 on a volume of 1.8 million shares, almost twice its daily average of 945,000. 

Fonterra Shareholders' Fund units fell 3.4 percent to $4.04, leading the benchmark index lower. Fonterra Cooperative Group shares, which are restricted to its farmers, fell 3.3 percent to $4.05. The Reserve Bank today said it was increasingly concerned about rising dairy farm debt. It said about a third of dairy farms are struggling to turn a profit at current prices. 

Smaller rival Synlait Milk, which pays a premium above Fonterra, rose 1.2 percent to $9.35 on a volume of 268,000 shares, more than twice its average volume. A2 Milk was up 0.8 percent at $15.98. 

Spark New Zealand was the most traded stock on a volume of 3.9 million shares, less than its usual volume of 5.6 million. It slipped 0.3 percent to $3.755. Kiwi Property Group rose 0.6 percent to $1.575 on a volume of 3.3 million, more than its 1.3 million average. 

Contact Energy was unchanged at $7.33 on a volume of 1.1 million shares after saying it will spend $30 million on geothermal appraisal wells in Taupo. 

Of other stocks trading on volumes of more than a million shares, Goodman Property Trust was down 1.1 percent at $1.82, Air New Zealand decreased 0.6 percent to $2.635, Meridian Energy fell 0.9 percent to $4.25, and Argosy Property dropped 2.2 percent to $1.31. 

Port of Tauranga rose 2 percent to $6.12, the day's biggest increase on the benchmark index. 

Stride Property Group rose 0.5 percent to $2.13 after reporting flat annual earnings and an unchanged dividend. It's forecasting an unchanged dividend for the 2020 financial year. Investore Property, which is managed by Stride, increased 0.6 percent to $1.75. 

NZX was unchanged at $1.05 after Hawke's Bay Regional Council said it will go ahead with plans to sell 45 percent of Napier Port in an initial public offering, with a view to listing the company in July. That would be the second IPO of the year, with would-be medicinal cannabis firm Cannasouth seeking up to $10 million in a listing next month. 

Outside the benchmark index, Turners Automotive Group rose 2.1 percent to $2.48 after beating its downgraded underlying earnings guidance. The company today said it may sell its Oxford Finance and EC Credit divisions as it seeks to focus on the auto retailing business, which it described as a core strength. 

Pacific Edge sank 16 percent to 18 cents after narrowing its annual loss. However, Davies said based on its cash position it may need to raise funds in the next six months. 

Asset Plus fell 1.5 percent to 64 cents as cheaper operating costs and a lower finance bill helped lift the property investor's annual profit. It will ask shareholders next month to approve a $58 million building acquisition. Augusta Capital, which manages Asset Plus, was down 2 percent at $1.20. 

Green Cross Health decreased 0.9 percent to $1.14 after reporting a 3.2 percent increase in annual profit, due largely to a strong result from its medical centres business. 

Kiwibank's Kiwi Capital Funding perpetual capital notes were the most traded debt security on a volume of 928,000. The notes, paying annual interest of 7.25 percent, will be redeemed in July. They traded at $1.037, down 0.1 percent. 


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