MARKET CLOSE: NZ shares drop in wide-ranging selloff; Summerset, Air NZ, Xero fall, Spark gains

Tuesday 14th June 2016

New Zealand shares fell as fears around the potential for Britain to exit the European Union continued to erode risk appetite. Summerset Group, Air New Zealand and Xero led the decline while Spark New Zealand gained.

The S&P/NZX50 Index fell 89.32 points, or 1.3 percent, to 6834.95. Within the index, 41 stocks fell, four rose and five were unchanged. Turnover was a modest $153 million.

Equity markets sold off for a second day in Asia, with Japan's Nikkei 225 Index falling 1.5 percent and Australia's S&P/ASX 200 Index declining 1.9 percent as that market played catch up after a public holiday on Monday.

"There's a flight to safety - gold is up as well," said Greg Smith, head of research at Fat Prophets. "We might be in for a choppy next few weeks."

Still,"if you break it down, it's not so bad," he said. "The NZ market has got that strong yield and property is pretty fully valued. Equities are still quite appealing."

Summerset dropped 5.5 percent to $4.30. Among other listed retirement village operators, Ryman Healthcare fell 1.8 percent to $9.29 and Metlifecare fell 1.8 percent to $5.60. Air New Zealand fell 4.4 percent to $2.08 and Xero declined 3.9 percent to $18.55. Coats Group fell 3.6 percent to 53 cents and Orion Health Group fell 3.2 percent to $4.60.

Spark, which was sold off after Sky Network Television announced its plan to merge with Vodafone New Zealand, rose 2.4 percent to $3.405.

"Spark is one of the highest yielding stocks in the market and the reality is we still remain in a low interest rate environment," Smith said. After its recent selloff, the stock had a yield of 7.5 percent, he said.

Sky TV fell 1.4 percent to $4.93. Meridian Energy fell 1.5 percent to $2.56 and Trade Me Group fell 1.5 percent to $4.54.

TruScreen fell 5.6 percent to 25.5 cents after the NZAX-listed cervical cancer test developer widened its annual loss as revenue dropped 21 percent because of delays in getting a new device certified.

BurgerFuel Worldwide fell 8.1 percent to $1.70 after the NZAX-listed fast food chain franchisor said it may ditch its plans to enter the US market and is uncertain of support from backer Franchise Brands.

BusinessDesk.co.nz

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