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MARKET CLOSE: Shares fall as power companies still plagued by smelter; property rises

Monday 4th November 2019

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(Nov. 1, 5:57 PM) New Zealand shares fell, as investors continued to assess the impact of Rio Tinto’s threat to close the Tiwai Point smelter. However, property stocks had a strong day, led by Vital Healthcare Property Trust.

The S&P/NZX50 50 Index declined 26.13 points, or 0.2 percent, to 10,761.69. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was $117.2 million

Vital Healthcare Property Trust led property stocks higher, lifting by 1.5 percent to $2.70, as 200,000 shares changed hands. Ryman Healthcare rose by 1.4 percent to $13.09 while Argosy Property lifted 1.5 percent to $2.70 and Precinct Properties New Zealand gained 1.4 percent to $1.85. Kiwi Property Group was unchanged at $1.59 having raised $180 million at $1.58 per share earlier this week. 

“Property has been relatively robust and I suppose that’s the reliable income stream as most are paying a quarterly income,” Craigs Investment Partners advisor Chris Timms said, adding that retirement village operator Ryman benefited from a respite in the North Island property market especially.  

“It has been reasonably quiet day considering Merdian has only traded about 1.5 million shares compared with 3 million over the last few days,” Timms said. 

Contact Energy was the worst of the electricity generator-retailer stocks, falling by 2.3 percent to $7.21. Trustpower was down 1.5 percent at $8.31, Mercury fell 1.3 percent to $4.90 and Meridian was down by about 1.7 percent at $4.52. 

“There was a flurry since the [Tiwai point] announcement and a lot of the impetus has been taken out and people have decided to move on have done so," he said.

"All of the gen-tailers have been relatively light today but still weaker." 

Vista Group International was the day’s biggest decliner, falling by 3.1 percent to $3.78, although on relatively light volumes as fewer than 100,000 shares traded hands compared to its 90-day average of 449,000.

Bank stocks also fell, with Australia and New Zealand Banking Group down by 1.7 percent at $28.30 after yesterday it said New Zealand net profit fell 8 percent to $1.83 billion in the 12 months ended Sept. 30. Westpac Banking Group, which reports next week, fell by 0.5 percent. 

Sky Network Television declined by 1.1 percent and closed at 89 cents, having lost about half its value so far this year. 

Today, the pay-TV operator revealed more detail about the 5 percent stake it gave NZ Rugby in order to secure broadcasting rights. Sky issued 21.8 million shares at 92 cents per share, valuing the stake at $20.07 million. ‬The deal also includes a condition that NZ Rugby must give at least 10 working days notice if it wants to sell the shares after the agreed two-year minimum period. 

Shares of Kathmandu Holdings dipped 0.3 percent to $3.13. The company today said group chief operating officer Reuben Casey will head the Kathmandu business following its $368 million acquisition of Rip Curl while Michael Daly will remain head of the Rip Curl business. Group chief executive Xavier Simonet continues as head of the whole group. 

Shares of Skellerup declined 1.3 percent to $2.27. Today the rubber goods maker announced it purchased UK based Silclear for 3.3 million British pounds in a deal which it said would be immediately earnings accretive. 

Scott Technologies rose by 3.4 percent to $2.45. This week the government announced the Dunedin-based company will receive a $5.8 million loan from the Provincial Growth Fund to set up an agriculture technology business unit. 

Investors will be looking ahead to the next Reserve Bank announcement later this month, Timms added, noting Westpac has questioned whether the central bank is going to cut interest rates despite that being predicted by most. 


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