MARKET CLOSE: NZ shares drop as Brexit fears weigh on equity markets; Coats, Orion, Metlifecare fall

Monday 13th June 2016

New Zealand shares fell as the local bourse joined a global selloff in equity markets amid concern Britain could leave the European Union. Coats Group, Orion Health Group and Metlifecare led the decline.

The S&P/NZX50 Index fell 47.51 points, or 0.7 percent, to 6924.27. Within the index, 37 stocks fell, 11 rose and two were unchanged. Turnover was $93 million, with the Queen's Birthday holiday in Australia keeping Australian investors on the sidelines.

Asian equity markets were a sea of red, with the Nikkei 225 Index down 3.2 percent in afternoon trading and Hong Kong's Hang Seng down 2.6 percent. Britain votes on June 23 on whether to leave the EU. An ORB poll published in the Independent newspaper on Friday showed Britons who wanted to leave, a Brexit, were 10 points ahead of those wanting to stay in the EU. The Vote Leave campaign, however, was reported as saying the split was more like 50-50.

"All the major offshore markets were down over the weekend - there's a lot of fear over whether the Brexit is going to happen," said Greg Easton, an adviser at Craigs Investment Partners. "It is going to be disruptive to sentiment as much as anything."

Coats, which is due to de-list from the NZX and ASX on June 24, fell 4.4 percent to 55 cents, leading the index lower. Orion declined 3.1 percent to $4.75 and Metlifecare fell 2.6 percent to $5.70.

Metro Performance Glass declined 2.2 percent to $1.79 and Air New Zealand fell 2 percent to $2.175.

Spark New Zealand fell 0.8 percent to $3.325, edging back down toward the 4-month low it reached last week amid concerns it will face a tougher rival if Vodafone merges with Sky Network Television. Sky TV itself fell 1.4 percent to $5 on doubts a merger will be enough to revive the fortunes of a company facing online content rivals.

Vital Healthcare Property Trust fell 1.8 percent to $2.25, Freightways declined 1.7 percent to $6.78 and Summerset Group dropped 1.7 percent to $4.55.

Restaurant Brands, the fast-food store operator, fell 1.6 percent to $5.48 after the rival Burger King chain, owned by Blackstone Group, widened its annual loss after taking a charge against its Kiwi Pacific joint venture and incurring higher finance and raw material costs.

Nuplex Industries rose 0.2 percent to $5.36. The company today released the independent advisers' report on Allnex Belguim SA’s $1.05 billion offer along with the notice of special meeting. Grant Samuel’s assessment values Nuplex’s business operations in a range of $1.12 billion to $1.20 billion, or between $5.36 and $5.86 per share. Allnex, which is controlled by Boston private equity firm Advent International, has offered $5.43 a share plus the interim dividend of 12 cents, making a total of $5.55.

TeamTalk dropped 8.3 percent to 55 cents, having touched a record low 48 cents after the telecommunications network company downgraded earnings guidance and said it won’t pay a final dividend this year as its 2012 purchase of rural broadband provider Farmside continues to suck up capital.

GFNZ Group was unchanged at 5.6 cents. The finance company formerly known as Geneva Finance lifted annual profit 61 percent by growing its loan book while widening margins in a low-interest rate environment.

Airwork Holdings rose 1.1 percent to $4.75 after the aviation service provider raised its annual earnings guidance after signing new customers from its expanded fleet. Net profit is expected to exceed $22 million in the year ending June 30, up from previous guidance to exceed $21 million, and up from $15.5 million in the 2015 year, it said in a statement.

Kirkcaldie & Stains was unchanged at $3.26. Veteran corporate raider Ron Brierley’s bid for Kirkcaldie & Stains has lapsed after he failed to attract enough acceptances from shareholders of the cashed-up retailer.

BusinessDesk.co.nz

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