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MARKET CLOSE: NZ shares fall; Air NZ warning weighs on tourism stocks

Wednesday 30th January 2019

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New Zealand shares fell, led lower by Air New Zealand, as the national carrier's earnings and softer outlook weighed on other tourism-related companies. Auckland International Airport and Tourism Holdings fell. 

The S&P/NZX 50 index declined 80.86 points, or 0.9 percent, to 8,925.52. Within the index, 26 stocks fell, 17 gained, and seven were unchanged. Turnover was $193.4 million. 

Air New Zealand hit a three-month low after warning its annual earnings will fall by as much as 37 percent. The airline expects pre-tax earnings of $340-400 million in the year ending June 30, downgrading its forecast due to global issues with Rolls Royce engines disrupting schedules. The stock ended the day down 13 percent at $2.83 on a volume of 3.1 million, more than three times it 90-day average. 

"One positive has been the dividend policy is unchanged at the moment - that's a positive for investors," said Peter McIntyre, an investment advisor at Craigs Investment Partners.

The downgrade flowed through to other tourism-related stocks, including rental motor home operator Tourism Holdings and Auckland Airport, and might indicate signs of global economic growth slowing down, he said. Tourism Holdings dropped 6.1 percent to $4.80 on a volume of 434,000 - more than twice the average. Auckland Airport fell 3.5 percent to $7.27 on a volume of 1.8 million. 

Casino operator SkyCity Entertainment Group decreased 0.3 percent to $3.78. McIntyre said it held up reasonably well after raising its earnings guidance yesterday. 

Fisher & Paykel Healthcare was the most traded stock on a volume of 4.7 million. Its three-month average volume is 613,000. The breathing mask maker fell 1.7 percent to $12.48, extending its decline as an analyst downgrade of rival ResMed weighed on the stock. McIntyre said the strong currency added to the tone, given F&P Healthcare's reliance on exports. 

Spark New Zealand fell 1.6 percent to $3.99 on a volume of 3.7 million, slightly above its average. Infratil increased 0.8 percent to $3.775 on a volume of 1.7 million, three times its average. Fletcher Building was unchanged at $4.98 on a volume of 1.6 million. 

Of the other companies trading on volumes of more than one million shares, Meridian Energy rose 1.6 percent to $3.57, Contact Energy increased 0.2 percent to $6.02, Trade Me decreased 0.3 percent to $6.34, Mercury NZ gained 0.7 percent to $3.56, Chorus was up 1.2 percent at $4.90, and Kiwi Property Group advanced 0.7 percent to $1.415. 

Z Energy fell 1.5 percent to $5.97 and Heartland Group was down 1.4 percent at $1.38 after announcing changes to their executive teams. 

Outside the benchmark index, QEX Logistics rose 0.8 percent to $1.20 after saying it expected increased revenue from a new distribution deal with Danone. 


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