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MARKET CLOSE: NZ shares mixed as Meridian, Z gain, A2, ANZ, Westpac drop

Tuesday 29th March 2016

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New Zealand shares were mixed, with the NZX 50 Index reaching a record high but with more companies falling. Meridian Energy rose ahead of going ex-dividend tomorrow while A2 Milk fell as its chief executive sold shares. Banks declined after Australia & New Zealand Banking Group lifted its bad debt provision last week.

The S&P/NZX 50 Index rose 13.8 points, or 0.2 percent, to 6,676.33. Within the index, 20 stocks rose, 22 fell and eight were unchanged. Turnover was $122 million.

Meridian Energy led the index's advancing, gaining 3.6 percent, or 5 cents, to $2.62. The energy retailer gives up rights to a 5.1 cent interim dividend along with a 2.44 cent special dividend tomorrow. Mark Lister, head of private wealth research at Craigs Investment Partners said investors may be buying the stock to get the payments.

Z Energy advanced 2.8 percent to $6.68. Just before market close, it announced it has settled a dispute with the New Zealand Customs Service for $18.5 million, with $13.5 million of that to impact on 2016 as $5 million was accrued in 2015. Z had already paid Customs $28 million, so has had $9.5 million returned to it under the settlement.

Australian banks continued last Thursday's downward trend, which was driven by ANZ Bank announcing an increase in bad debt provisions. The dual-listed Australian bank said it would increase its provisions for bad debt by at least A$100 million, on top of the A$800 million it anticipated for the first half of 2016, which it projected in February.

ANZ dropped 2.7 percent to $26.01 and Westpac Banking Corp shed 2.9 percent to $33.50. AMP dropped 0.5 percent to $6.40.

"That announcement did catch a few people by surprise, they've come under a bit of selling pressure," Lister said. "In this part of the world we don't need to be concerned about banks failing, but it's going to eat into profits a little bit, which concerns investors."

NZX gained 2 percent to $1.02, Contact Energy rose 1.8 percent to $5.04, and Fletcher Building grew 1.7 percent to $7.81. 

A2 Milk was the worst performer, down 5.5 percent to $1.89. Chief executive Geoffrey Babidge sold 1 million shares for $1.99 million, leaving him with 7.5 million shares in the company.

Outside the main index, Veritas Investments fell 14.8 percent to 23 cents, matching a record low set earlier this month, and valuing the company at about $10 million. Veritas and local Burger King franchise operator Antares Restaurant Group announced they have agreed to sell the assets of their joint venture which supplied beef patties to the fast food operator after the deal broke down last year.

Trilogy International gained 2.9 percent to $3.36. Chief executive Angela Buglass has sold 100,000 shares after the first tranche of 400,000 options vested, taking advantage of a stock price that soared 284 percent in the past year and reached a record $3.52 this month.

IkeGPS was unchanged at 66 cents and has dropped 5.7 percent so far this year. An executive reshuffle will see the departure of the laser measurement tool developer's chief financial officer and senior vice president of sales.


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