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MARKET CLOSE: NZ shares fall on Grexit fears; Fletcher, Kathmandu, ANZ drop

Monday 6th July 2015

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New Zealand shares fell in a region-wide sell off as uncertainty over Greece's financial stability overshadowed equity markets. Dual-listed stocks such as Kathmandu Holdings, Westpac Banking Corp and Australia and New Zealand Banking Group dropped, while Fletcher Building tumbled to the lowest level in more than two years.

The S&P/NZX 50 Index declined 64.28 points, or 1.1 percent, to 5776.62. Within the index, 36 stocks fell, five rose and nine were unchanged. Turnover was $119 million.

The local bourse kicked off a region-wide sell off after Greece's referendum delivered the left-wing Syriza government a victory, with 61.3 percent of the country voting to reject the bailout offer from their European creditors and its accompanying austerity measures. Across the Asia-Pacific region, Hong Kong's Hang Seng Index dropped 2.7 percent in afternoon trading, Japan's Nikkei 225 Index fell 1.6 percent and Australia's S&P/ASX 200 Index declined 1.2 percent.

"People dislike a lack of certainty and they get nervous and that's what we're seeing in markets," said Angus Gluskie, managing director at White Funds Management in Sydney. "People are viewing this as market-wide event, a liquidity event, which means it is affecting everything."

Dual-listed stocks weighed on New Zealand's bourse. Kathmandu, the outdoor goods retailer, led the benchmark index lower in afternoon trading, tumbling 4.1 percent to $1.65. Fletcher Building, the construction and building supplies firm, retreated 2.1 percent to a two-and-a-half-year low of $7.90. ANZ fell 2.7 percent to $35.80 and Westpac slid 1.9 percent to $36.30. Trade Me Group, the online auction site, declined 2.9 percent to $3.39.

"We're the first market open following the Greek vote," said Bryon Burke, head of equities at Craigs Investment Partners. Dual-listed stocks have "had a double whammy, because our dollar surprisingly enough has strengthened against the Aussie."

Air New Zealand, the national carrier, fell 0.8 percent to $2.55. Moody's Investors Service upgraded its credit rating by one notch to Baa2 after changing its debt treatment of operating leases and on the prospect that cheaper jet fuel will assist the national carrier's earnings for the next two years.

Spark New Zealand, formerly Telecom Corp, fell 1.1 percent to $2.79.

Of the day's few gainers, Pacific Edge, the Dunedin-based biotech firm, was the best performer on the benchmark index, up 1.7 percent to 61 cents.

Outside the benchmark index, PGG Wrightson rose 1.1 percent to 47 cents. The Commerce Commission is investigating Wrightson over the fees the rural services firm, which is controlled by China's Agria Corp, charged during the implementation of a national livestock tagging programme.

Arvida Group fell 2.3 percent to 87 cents. The retirement village settled its $62 million acquisition of Aria Bay, Aria Park and Aria Gardens.

Mercantile Investments was unchanged at 15 cents in its debut on the local bourse via a compliance listing, meaning it raised no new capital. The Sydney-based firm is veteran corporate raider Ron Brierley's investment vehicle.

 

 

BusinessDesk.co.nz



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