MARKET CLOSE: NZ shares fall; Orion slides to record low, Spark, MRP decline

Wednesday 10th June 2015

New Zealand shares fell after Orion Health said an expected US-based contract has been delayed. Spark New Zealand, MightyRiverPower and Contact Energy declined.

The NZX 50 Index fell 58.241 points, or 1 percent, to 5803.865. Within the index, 38 stocks fell, seven rose and five were unchanged. Turnover was $136 million.

Orion slid 9.7 percent to a record low of $4 after the health and management software system company said a contract with one of its US payer customers has been delayed for 12 months because the customer wants "to focus on more immediate priorities", but Orion didn't see the need to revise its forecasts for 2016. It comes after the company said on Jan. 30 that delays in settling contracts and paying bills in North America would weigh on revenue in the second half of its financial year.

"It's the nature of this business that they've got some very exciting opportunities over the medium term and getting the timing on some of those growth contracts is difficult," said Shane Solly, director at Harbour Asset Management. "That doesn't necessarily destroy the value of the business but the timing was not as expected. The nature of the business means contracts are difficult to get timing on but some people have been disappointed by that."

Offshore bonds fell, pushing yields higher, which weighed on the local bourse which is held by international investors for its relatively high yield, Solly said. Contact fell 3.9 percent to $5.28. MRP declined 2.6 percent to $2.66. Spark dropped 1 percent to $2.85. Meridian Energy decreased 2.5 percent to $2.165.

"MightyRiver, Contact and Spark are certainly influenced by bond yields going up and these stocks do reflect that," Solly said.

Air New Zealand dropped 5 percent to a month low of $2.67. Rival Qantas Airways is stepping up its codeshare with American Airlines and said "the enhanced relationship also provides opportunities for future growth into trans-Pacific markets not currently served by either airline, such as New Zealand".

Infratil, the Wellington-based infrastructure investor, fell 0.3 percent to $3.22. UK investment house Utilico Investments has continued to reduce its stake in Infratil, raising $7.9 million in an on-market selldown this month.

Of the day's few gainers, Skellerup Holdings, the industrial rubber goods maker, was the day's best performer, up 1.5 percent to $1.37. Coats Group, the threadmaker, advanced 0.9 percent to 56 cents. Fletcher Building, the building supplies and construction firm, gained 0.4 percent to $8.41.

BusinessDesk.co.nz

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