MARKET CLOSE: NZ shares slip from record high; ANZ Bank, Spark fall, Warehouse gains

Friday 6th November 2015

New Zealand shares fell, led by Australia & New Zealand Banking Group and Spark New Zealand, as investors said they want more evidence of growth prospects after the benchmark index surged 8.5 percent in a four-week rally to a record high. Xero, Heartland New Zealand and Warehouse Group rose.

The S&P/NZX 50 index fell 0.06 percent, or 3.89 points, to 6069.74. Within the index, 23 stocks rose, 16 fell and 11 were unchanged. Turnover was $105.9 million.

"October was the best month in six years, so we're coming off a very strong period," said Mark Lister, head of private wealth research at Craigs Investment Partners. "We've had a really strong run and now it's run out of puff. I wouldn't be surprised if it loses a bit of steam over the next couple of weeks until there's some new information."

ANZ Bank led the index lower, falling 3.7 percent to $28. The Australia lender went ex-dividend today, meaning investors are no longer entitled to its 95 cents a share final payment.

Spark fell 3.2 percent to $3.33 after the nation’s biggest communications company confirmed earnings guidance and dividend expectations at its annual meeting in Auckland today. Chairman Mark Verbiest said the 2016 financial year was off to a “good start”, with first quarter results “on plan” and no change to previous profit guidance. Managing director Simon Moutter told the meeting that Spark expected to overtake Vodafone New Zealand as the leading provider of mobile services in the current financial year as the company revives its fortunes following the rebranding of Telecom to Spark.

"Maybe the market had just got a little bit optimistic in the lead up to today's AGM, so it may have been a little bit underwhelming to some investors," Lister said. Spark had a good run this year, rising 13 percent in October alone, "so it might just be nothing more than a bit of profit taking." Lister said.

Xero grew 5.9 percent to $19.32 after posting its interim results yesterday.

Heartland rose 3.2 percent to $1.30. The listed bank announced today it would simplify its corporate structure by amalgamating all its businesses, including its senior finance unit and Harmoney Corp investment, and has signalled plans to return up to $100 million to shareholders. The bank plans to raise $50 million, with the possibility of a further $25 million in oversubscriptions, via a tier 2 capital instrument to bolster its balance sheet and make its capital structure more in line with that of New Zealand's other registered banks.

Warehouse rose 2.2 percent to $2.77. The largest listed retailer launched its long-heralded financial services brand, Warehouse Money, offering two credit cards and five new insurance products, and also announced plans to launch a pre-pay mobile brand later this month. Warehouse boosted first-quarter sales 7.7 percent to $634.5 million, which Lister said were "pretty solid", and improved margins at its discount chain ahead of the key Christmas trading period.

Coats Group gained 1.5 percent to 68 cents. Port of Tauranga rose 1.4 percent to $18.75 and Diligent Corp advanced 1.3 percent to $6.08. Auckland International Airport fell 0.7 percent to $5.42 and Trade Me Group declined 0.5 percent to $3.83.

BusinessDesk.co.nz

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