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MARKET CLOSE: NZ shares snap six-day gain; A2 falls

Tuesday 10th September 2019

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(Sept. 9, 5:56 PM) New Zealand shares snapped a six-day winning streak as investors pause for breath with the benchmark index near a record and outperforming all bar China's CSI 300 Index across Asia so far this year. A2 Milk led the market lower. 

The S&P/NZX 50 Index decreased 16.06 points, or 0.1 percent, to 11,202.93. Within the index, 20 stocks fell, 25 rose, and five were unchanged. Turnover was $107.7 million. 

New Zealand's benchmark is still up about 27 percent so far this year, lagging China's CSI 300's 32 percent gain. China's Shanghai Stock Exchange Composite Index is the third-best performer in the year to date, up 21 percent, according to Refinitiv data. 

"We're in a bit of a lull just after earnings season, but the NZX50's gone through 11,000 - it's only natural to expect it to pause for breath at some point," said Greg Smith, head of research at Fat Prophets. 

Smith said the lingering trade dispute between US and China continues to be a cause of concern for investors. The prospect of upcoming negotiations was welcomed by investors, but Smith noted that may be a false dawn given White House economic adviser Larry Kudlow said the conflict could take years to resolve. 

Stocks with global exposure - both importers and exporters - were among those to decline. 

A2 led the market lower, down 3.3 percent at $14.89 on a volume of 470,000 shares, less than its 90-day average of 784,000. Synlait Milk, which supplies A2 and is reporting earnings on Thursday, decreased 0.5 percent to $9.40. 

Mainfreight fell 2 percent to $40.52, Scales Corp was down 1 percent at $5, and Fisher & Paykel Healthcare slipped 0.7 percent to $17.51. Sky Network Television decreased 1.8 percent to $1.11 on a volume of 2.8 million shares, the biggest volume for the day, and more than three times its 756,000 average. 

New Zealand's market has been a favourite among investors because of the relatively high dividend yields on offer at a time when low international interest rates boost the allure of reliable income from utility and property stocks.

Those yield plays were mixed today. Genesis Energy fell 0.7 percent to $3.635 on a volume of 1.6 million shares, Kiwi Property was down 0.6 percent at $1.68, Contact Energy fell 0.6 percent to $8.93, and Mercury NZ decreased 0.4 percent to $4.23 on a volume of 1.5 million shares. 

Trustpower posted the day's biggest gain, up 3.5 percent at $8.24 on a volume of 23,000 shares, less than a third of its 78,000 average. Infratil increased 2.3 percent to $4.98 on a volume of 1.2 million shares, Meridian Energy was up 1.6 percent at $5.66 on a volume of 1.1 million and Goodman Property Trust rose 1.3 percent to $2.24 on a volume of 2.5 million units. 

Of other stocks trading on volumes of more than a million shares, Spark New Zealand rose 1.3 percent to $4.705 and Fletcher Building rose 2.3 percent to $4.82. 

NZX was down 0.8 percent at $1.28. A steering committee report on how to revive New Zealand's capital markets made 42 recommendations, including changing the tax regime for KiwiSaver funds and share trading. 

Outside the benchmark index, Cannasouth jumped 29 percent to 75 cents on a volume of 2.3 million shares, its busiest day since it listed in June. The stock closed above its initial public offering price of 50 cents for the first time last week and has almost doubled in value since Aug. 27. 


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