MARKET CLOSE: NZ shares fall; Auckland Aiport, Metlifecare, Air NZ decline

Wednesday 26th August 2015

New Zealand shares fell as investors continued to fret over China's economic outlook. Auckland International Airport led the market lower, while Metlifecare declined after reporting its annual earnings.

The S&P/NZX 50 Index dropped 33.41 points, or 0.6 percent, to 5577.78. Within the index, 31 stocks fell, 15 rose and four were unchanged. Turnover was $193 million.

Investors remained cautious after sharp declines on the Shanghai Composite Index and concerns about slowing growth in the world's second largest economy stoked volatility across global markets. New Zealand's benchmark index had climbed to record levels earlier this year, pushed higher by investors chasing yield in a globally low interest rate environment.

"There's still a bit of general nervousness," Robert Garden, investment advisor at Craigs Investment Partners said. "It's always the case when these selloffs happen, it takes longer to bounce back up than it does to come down.

"I think it caught everyone a wee bit by surprise as to how the pullback happened, it wasn't unexpected that it was going happen, it was just whether it was going to drift off over a couple of months and take 5 or 10 percent out of the market that way or happen pretty quickly, and obviously when it happens pretty quickly it knocks confidence a bit more than a gradual selloff over time."

Auckland Airport, the country's busiest gateway, led the benchmark index lower down 3.6 percent to $4.75, having gained about 17 percent since the start of the year. DNZ Property, the property investor, fell 1.2 percent to $2.11 and has advanced 12 percent since the start of the year.

Air New Zealand declined 3 percent to $2.57. The national carrier boosted annual profit 24 percent to $327 million on strong demand, cost efficiencies and lower fuel prices. The airline will offer up to two million domestic fares under $100 and boost domestic capacity 8 percent this year as it answers a competitive threat from Jetstar will grow the overall number of people travelling and provide a regional economic boom.

Metlifecare fell 2.1 percent to $4.31. The retirement village operator reported a 78 percent increase in annual profit to $122.7 million after its properties jumped in value.

"Their build rate wasn't as high as everyone would like," Garden said. "It was a bit softer than everyone expected."

Ebos Group, the healthcare and animal care products company, rose 1.8 percent to $10.69. It posted a 15 percent gain in full-year profit to $105.9 million, led by increased sales and an improved margin from its Australian healthcare businesses.

"Investors have been waiting to see how the big acquisition they made over in Australia would transform the business to a different beast to what it was," Garden said.

Sky Network Television, the country's dominant pay-TV provider, declined 3.1 percent to $4.98. Heartland New Zealand, the bank, declined 1.8 percent to $1.07.

Kathmandu Holdings climbed 9.7 percent to $1.70. The outdoor clothing and equipment chain facing a hostile takeover bid has announced an immediate review of its head office structure which could cut up to 10 percent of top management employees in Australia and New Zealand. The stock advanced prior to the late afternoon announcement.

Metro Performance Glass rose 1.5 percent to $1.36. The glass processor said it expects first-half profit to be below its prospectus forecast as capacity constraints in New Zealand's construction industry weighs. Profit will be between $10 million and $11 million in the six months ending Sept. 30, below its July 2014 prospectus forecast for profit of $12.1 million, chairman John Goulter told shareholders at its first annual meeting since floating on the NZX last July.

SkyCity Entertainment Group fell 0.8 percent to $3.96. The casino operator may raise more capital selling notes in the US private placement market after completing the sale of as much as $125 million of seven-year bonds next month that it plans to use to repay bank debt.

Outside the benchmark index, TeamTalk was unchanged at 80 cents. The telecommunications company reported a 53 percent drop in annual earnings to $1.8 million as sales fell across its radio and broadband network operations, in what it said was a "tough year."

Wellington Drive Technologies rose 3.3 percent to 6.2 cents after the unprofitable energy efficient motor maker narrowed its first-half loss to $671,000 on sales growth in Latin America and as a weaker kiwi dollar lifted the value of its overseas earnings.

Marsden Maritime Holdings gained 0.4 percent to $2.90 after the Northland port operator posted a flat annual profit of $8.39 million.

BusinessDesk.co.nz

Comments from our readers

No comments yet