MARKET CLOSE: NZ shares fall in light holiday trading, weighed on by ANZ, Westpac

Monday 29th May 2017

New Zealand shares fell in quiet holiday trading as dual-listed banking stocks Australia and New Zealand Banking Group and Westpac Banking Corp weighed on the local market, while positive earnings spurred some buying interest in stocks including Fisher & Paykel Healthcare and Investore Property.

The S&P/NZSX 50 index dropped 28.8 points or 0.4 percent to 7,412.74. Within the index, 30 stocks fell, 16 rose and four were unchanged. Turnover was a light $79.2 million. Trading was thin due to the two-day holiday in China and holidays in Britain and the US overnight, said Nigel Scott, a director at Craigs Investment Partners.

Stock valuations are starting to move toward the top of their ranges after positive earnings reports and people are "just a little bit more conservative" in their approach to the market, with investors taking a "more patient, selective" approach, Scott said. MSCI index changes - due Wednesday - may also be playing a role in the tepid volumes as investors reposition their portfolios for the new quarter, he said.

A2 Milk, which is traded heavily by Australian investors, led the market lower, shedding 3.2 percent to $3.32 as investors continued to take some profits. While the stock has come under some pressure in recent sessions, it is still up 61 percent so far this year.

Among other sectors, dual-listed bank ANZ fell 2.5 percent to $29.20 while Westpac shed 2.3 percent to $31.51. Australia's S&P/ASX 200 was trading down 0.5 percent in afternoon trading, partly weighed by financial stocks.

Metro Performance Glass dropped 2.9 percent to $1.35. The stock remains out of favour after it delivered a $19.4 million net profit for the year to March 31, down from $21.3 million a year earlier.

In the other direction, Comvita was the biggest gainer on the day, adding 1.8 percent to $5.55 as bargain hunters moved in. The stock has fallen 32 percent this year on concerns about its access to the Chinese market and, more recently, the potential impact of the myrtle rust fungal disease on its manuka honey supply. According to the latest press release from the Ministry of Primary Industries, the number of properties infected with the disease now stands at 25.

Investore Property - the property investors spun out of Stride Property last year - added 0.7 percent to $1.36 after it posted an inaugural full-year profit as a listed company that beat its prospectus forecast.

Real estate group Argosy Property added 0.5 percent to $1.015 investors remain upbeat on the stock after it lifted its annual distributable earnings by 4.6 percent last week.

F&P Healthcare also continued to attract interest after its result last week, adding 0.9 percent to $10.70. The company posted an 18 percent increase in full-year net profit but more importantly, according to Scott, it provided clarity on the cost of its litigation costs over a patent dispute with ResMed and "that clarity is being rewarded by the market," he said.

Trade Me benefited after the company announced a tie-up with ASX-listed Afterpay Holdings, an Australian "buy now, pay later" online payments provider, adding 0.6 percent to $5.32. The partnership will let Trade Me offer interest-free deferred payments to buyers later this year.

Orion Health Group jumped 15 percent to $1.2 ahead of its results Tuesday, which are also expected to provide clarity on the software developer's capital needs. The stock has fallen 48 percent so far this year.

Among smaller caps, Evolve Education Group added 1 percent to $1.02. Late last week there was an on market disposal of 2,286,495 shares by director Gregory Kern, managing director of Kern Group, leaving him with just 50,000 shares.

Blis Technologies was unchanged at 3.1 cents. Earlier the company said regulatory processes surrounding ownership changes in a key customer are continuing to impact orders but it remains upbeat about its market opportunities, particularly in China, and expects to deliver a profit this year.

(BusinessDesk)

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