MARKET CLOSE: NZ shares fall, led by Trade Me; F&P Healthcare drops as kiwi gains

Friday 8th July 2016

New Zealand shares fell, led by Trade Me Group, as some investors were happy to book profits on a market that has gained 11 percent this year. Fisher & Paykel Healthcare dropped on concern a strong kiwi dollar will hurt exporters.

The S&P/NZX 50 Index fell 7.42 points, or 0.1 percent, to 7000.1. Within the index 24 stocks fell, 19 rose and eight were unchanged. Turnover was $183 million.

Trade Me, the auction website, fell 3.8 percent to $4.81 and Mainfreight, the transport group, declined 2.3 percent to $16.31. Tegel Group Holdings, the country's largest poultry producer, fell 1.8 percent to $1.63.

F&P Healthcare, which gets more than 50 percent of its sales in US dollars, declined 1.5 percent to $9.98. The kiwi is heading for a 1.2 percent weekly gain against the greenback and is trading near a 14-month high against the greenback, reducing of exporters' revenue when it is converted back into New Zealand dollars. The kiwi is also at a two-month high against the Australian dollar.

Fletcher Building, which counts Australia as its second-largest market, fell 1.4 percent to $8.58, even after the Commerce Commission approved its $315 million acquisition of rival construction company Higgins Group Holdings.

"Investors have to be mindful of the fact that some businesses have US and Australian dollar exposure," said James Smalley, a director at Hamilton Hindin Greene. "This high currency is going to affect a number of these exporters' earnings."

Westpac Banking Corp declined 2.8 percent and Australia & New Zealand Banking Group fell 1.2 percent to $23.98. Standard & Poor's yesterday put Australia's major lenders on a 'negative' outlook, following a similar downgrade to Australia's sovereign rating outlook.

Ebos Group, which counts Australia as its biggest market, fell 0.9 percent to $16.01.

Spark New Zealand was the biggest gainer, rising 3 percent to $3.76. Sky Network Television rose 2.7 percent to $4.88 and Heartland Bank gained 1.6 percent to $1.25.

Smalley said while some investors may have sold shares today to take advantage of recent gains, the market remained attractive to those facing paltry returns from bank deposits.

"People are looking at other places to try to boost their income," he said. "This is one of the highest-yielding stock markets in the Western world."

Delegat Group rose 2.5 percent to $6.15 after New Zealand’s largest listed wine company revised its forecast net operating profit for the 2016 financial year up $1 million to $37 million on record case sales.

Orion Health Group dropped 1.5 percent to $4.73 and Warehouse Group fell 1.4 percent to $2.78.

Blis Technologies stock fell 8.5 percent to 4.3 cents after the company told the NZX it wasn't in possession of any material information that could explain a 42 percent surge in its stock price since June 30.

BusinessDesk.co.nz

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