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MARKET CLOSE: NZ shares fall as property market weighs on Summerset, Metlifecare

Monday 8th April 2019

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New Zealand shares fell for a fourth day as the threat of a slowing property market was seen weighing on retirement sector stocks such as Summerset Group and Metlifecare. 

The S&P/NZX 50 Index declined 49.97 points, or 0.5 percent, to 9,807.08. Within the index, 29 stocks fell, 15 rose, and six were unchanged. Turnover was $118.67 million. 

Summerset led the market lower for a second day, down 4.9 percent at $5.77 on a bigger volume than usual of 790,000 shares. The retirement village operator and developer reported weaker unit sales last week, citing slowing property markets in Auckland and Christchurch for the decline. 

Metlfecare fell 3.7 percent to $4.73, Ryman Healthcare decreased 0.5 percent to $12 and Arvida Group was down 0.8 percent at $1.30. 

Craigs Investment Partners today recommended its clients sell Summerset, expressing a cautious view of the housing market to offset the sector's structural drivers such as an ageing population. 

"Summerset updated the market with its unit sales last week . That disappointed, hence we've seen weakness in retirement village operators," said Peter McIntyre, an investment adviser at Craigs. 

Infratil fell 1.6 percent to $4.23 after downgrading its earnings guidance after a sharp increase in the value of its portfolio triggered a bigger incentive fee for its manager, Morrison & Co. 

McIntyre said the increased fee reflected how well Morrison & Co had managed the portfolio, given the incentive payment kicked in for performance in excess of 12 percent. 

Companies paying reliable dividends were generally weaker, with most firms reporting in February having shed rights to those dividends. Port of Tauranga declined 3 percent to $5.45, Mainfreight fell 2.4 percent to $36.10, and Ebos Group decreased 2.1 percent to $20.80.

Mercury NZ was the most traded stock with a volume of 2 million shares. It rose 1.6 percent to $3.91. Contact Energy fell 1.7 percent to $6.81 on a volume of 1.8 million shares, and Spark New Zealand increased 1.4 percent to $3.695 on a volume of 1.8 million.

Of other companies trading on volumes of more than a million, Kiwi Property Group decreased 0.7 percent to $1.485, Meridian Energy was down 1.7 percent at $4.06, Auckland International Airport fell 1 percent to $8.05, Goodman Property Group slipped 0.9 percent to $1.705, and Sky Network Television declined 0.8 percent to $1.27. 

Restaurant Brands New Zealand posted the biggest gain on the day, up 3.6 percent to $8.70. Mexico's Finaccess Capital wrapped up its partial takeover last week, where it secured a 75 percent stake in the fast-food operator. 

McIntyre said a lot of money appears to have been recycled back into the company, with the new controlling shareholder continuing with the same growth aspirations and investors wanting to keep their exposure to that sector. 

Air New Zealand rose 2.1 percent to $2.74, Gentrack gained 1.9 percent to $5.45, Heartland Group increased 1.9 percent to $1.65, and Tourism Holdings was up 1 percent at $4.96. 

Outside the benchmark index, Green Cross Health jumped 11 percent to $1.15, the highest it's been since early February. 


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