Sharechat Logo

MARKET CLOSE: NZ shares drop 1.4% on foreign selling, A2 Milk and Meridian lead losses

Thursday 11th January 2018

Text too small?

New Zealand shares fell over 1 percent as foreign investors sold back their stakes, with A2 Milk Co and Meridian Energy hit hardest. 

The S&P/NZX50 Index dropped 114.46 points, or 1.4 percent, to 8,250.44. Within the index, 36 stocks fell, 10 were unchanged and just four rose. Turnover was $131.7 million.

"The market has certainly had a change of direction. Stocks held largely by foreign investors have come under pressure and there are not a lot of buyers in the marketplace at the moment, so when you have a number of investors wanting to get out it certainly puts pressure on pricing," said Grant Williamson, investment advisor at Hamilton Hindin Greene.

"It does look like foreign investors are taking profits, the Kiwi dollar has helped them recently by strengthening," Williamson said. "The market is still underpinned by solid fundamentals. We've had such a good run, we have been overdue for somewhat of a correction, but I don't see it lasting too long." 

Blue chip stocks like Fletcher Building, Meridian Energy, and Ryman Healthcare have dropped on the back of this selling, Williamson said. Meridian Energy was the second-worst performer on the index today, falling 2.7 percent to $2.90, with Ryman down 2.1 percent to $10.94 and Fletcher falling 1.3 percent to $7.61.

A2 Milk Co, the biggest gainer last year as its share price soared on optimism about the Chinese appetite for its baby formula, was the worst performer today, down 4.4 percent to $7.74.

Port of Tauranga was the best performer, up 1.4 percent to $5.03, while Fonterra Shareholders Fund gained 1.2 percent to $6.60 and Trustpower rose 1.2 percent to $5.97.

Outside the benchmark index, Warehouse Group dropped 2.4 percent to $2.06. It expects first-half adjusted earnings from continuing operations to fall 22-to-28 percent as it keeps investing to transform the business. 

The Auckland-based company said first-half adjusted net profit from continuing operations will probably be $32 million-to-$35 million, which "includes a significant accrual for a redesigned incentive programme, intended to reward better than expected financial performance along with reinforcing specific behaviours necessary to execute the transformation."

"It was nothing to get excited about, the company still seems to be struggling somewhat," Williamson said. 

New Zealand Oil & Gas was unchanged at 71 cents. OG Oil & Gas has declared its partial takeover for NZOG unconditional, having achieved more than enough support to take control of the NZX-listed energy explorer and producer. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Methven shares halted pending material transaction
Housing market continued cooling in November
ComCom nudges Fonterra towards greater transparency
Infratil forecast unaffected by delayed return from Longroad asset sale
December 14th Morning Report
NZ dollar trades in tight range as ECB confirms end to quantitative easing
MARKET CLOSE: NZ shares rise as optimism over US-China trade deal lingers; Fletcher gains
NZD under pressure against Aussie as investors cheered by easing of trade jitters
PFI properties’ valuation rises 5.5% to $1.32 billion
Broader definition of workplace harm in new govt health & safety strategy

IRG See IRG research reports