Sharechat Logo

MARKET CLOSE: NZ shares fall, Sky TV and FPH drop while Chorus, Arvida rise

Wednesday 5th September 2018

Text too small?

New Zealand shares fell, led lower by Sky Network Television on continued earnings worries and Fisher & Paykel Healthcare, while Chorus and Arvida Group gained.

The S&P/NZX50 Index dropped 64.15 points, or 0.7 percent, to 9,228. Within the index, 22 stocks fell, 20 rose, and eight were unchanged. Turnover was $137.2 million. 

Leading the benchmark index lower was Sky TV, which dropped 3.5 percent to $2.20. The shares have dropped 17 percent since the company gave its annual earnings report last month.

"That's a continuation of a trend we've seen since they reported, I would say on concern of continued loss of subscribers, though that's no great news to anybody," said Josh Wilson, principal and senior portfolio manager at NZFunds. "The way I looked at it was they'd done a really good job at taking costs out of the business, but there's only so far you can cut costs and if revenues continue to decline and follow the trend that they have been, then earnings become the meat in the sandwich and will get squeezed."

Fisher & Paykel Healthcare fell 2.7 percent to $15.20. On Monday, it warned the cost of contesting the latest patent allegations from rival ResMed will cut annual earnings by as much as $10 million in a far-ranging dispute across multiple jurisdictions. 

"It's just part of doing business from here on in, basically," Wilson said. "Fisher & Paykel is fortunate it's not the biggest part of their business, it's not as much of a threat as if it was infringing around the hospital part of their business. They had a really strong run and this has brought it back to earth a bit."

A2 Milk Co fell 3.3 percent to $12.40 and Auckland International Airport dropped 1.9 percent to $6.99.

Chorus was the best performer, up 2.3 percent to $4.83, while Arvida Group rose 2.3 percent to $1.35 and Metlifecare gained 1.9 percent to $6.40.

NZFunds' Wilson said much of the focus today had been off-market, with both Steel & Tube Holdings and Oceania Healthcare in trading halts. 

Steel & Tube was frozen at $1.23 as it ran a $17.8 million shortfall bookbuild following its deeply discounted 1-for-1.9 pro rata rights offer, where shareholders bought about $42.3 million of new shares at $1.05.

Oceania Healthcare was stopped at $1.14 as cornerstone shareholder Macquarie Group began selling down some of its shares. Macquarie intends to sell up to 95 million shares at 79 cents, representing 15.6 percent of the company, and only part of the 57.2 percent stake it owns. The smaller stake means the Macquarie entity will no longer be able to control the appointment of any directors to the board.

(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:

New director of Vital Healthcare’s manager unfazed by fire-at-will clause
QMS pulls out A$35M from NZ unit in MediaWorks merger
Take care to avoid
Is this the calm before a storm of credit card thrashing?
Shrinking meat and dairy product manufacturing weighs on growth outlook
Jon Macdonald to stay on as Trade Me boss through takeover tussle
Shareholders’ Association wants Finzsoft to come clean
A2 rings in more executive changes under new CEO Hrdlicka
NZ dollar dips as China-US trade tensions cast pall over global markets
No end in sight to global market turmoil

IRG See IRG research reports