NZ shares end lower on regional jitters, sell down to buy Metilifecare

Friday 7th April 2017

New Zealand shares fell as investors likely freed up funds to buy Metlifecare after Infratil opted to sell its stake and on regional jitters after the U.S. launched cruise missiles at a Syrian airbase in response to a recent chemical attack.

The S&P/NZX 50 index fell 46 points, or 0.6 percent, to 7,243.750. Within the index, 13 stocks gained, 28 fell and nine were unchanged. Turnover was unusually heavy, at $405.94 million.

Infratil added 1.2 percent to $3 a share after news it had sold its cornerstone stake in Metlifecare for $237.9 million, generating an annual return of 15.5 percent over the three-and-a-half years it held shares of the retirement village operator and developer.

"It does give them a fairly large cash stockpile to maybe look at other opportunities. It will be interesting to see what they've got in mind for those funds," said James Smalley, director at Hamilton Hindin Greene. Metlifecare shed 4.5 percent to $5.80.

He said most of the declines were in the "heavier end of town" with large caps losing ground, like Contact Energy, which shed 1.7 percent to $5.17 and Auckland International Airport,which shed 1.5 percent to $6.70. Tourism Holdings ended down 1.9 percent at $3.55 while Meridian shed 1.9 percent to $2.895.

"The need to raise funds to take up some of that Metlifecare purchase may have led to a bit of selling across the market today," he said. "It's fairly large in the context of our market and could be a factor of why the bourse is where it is at the moment."

In the other direction, the biggest gainer on the day was Tegel Group, up 4.3 percent to $1.21 as investors were cheered after it told investors and analysts at the Credit Suisse / First NZ Capital Food and Beverage Conference in Sydney Thursday it is well-positioned for export growth and reiterated its full year guidance.

Smalley said the presentation may have "helped regain some confidence in the stock." The stock has fallen recently on concerns ample supplies of chicken would stifle earnings.

Comvita added 2.5 percent to $6.97 "as a few bargain hunters are stepping in, think the sell-down is overdone," he said. The shares slumped earlier in the week after the manuka honey company warned it will post an operational loss this year due to weaker than expected trading and as a poor season dents the honey harvest in New Zealand.

Looking ahead, Smalley said investors will be watching for the "reaction from the Russians" after Trump said he ordered missile strikes against a Syrian airfield from which a deadly chemical weapons attack was launched, declaring he acted in America's "national security interest" against Syrian President Bashar al-Assad.

"It does add an element of macro-uncertainty and that may have led investors to sit on the sidelines toward the end of the week," he added.

(BusinessDesk)

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