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MARKET CLOSE: NZ shares down, Chorus and Air NZ fall while Ryman, NZX gain

Wednesday 12th July 2017

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New Zealand shares dropped, led lower by Chorus and Air New Zealand, while Ryman Healthcare and NZX rose as investors search for untapped value.

The S&P/NZX50 Index fell 42.55 points, or 0.6 percent, to 7,586.02. Within the index, 29 stocks fell, 13 rose and eight were unchanged. Turnover was $176 million. 

The local index followed the Australian index lower, with the ASX down 1.1 percent at 5pm local time, after US markets fell overnight amidst uncertainty ahead of Federal Reserve Chair Janet Yellen's testimony to the US House panel.  Trading has been softer in the past fortnight as school holidays have begun, with institutional news scarce ahead of the August financial reporting season.

"You've got a bit of time before the next results round, the market is still pretty pricey so it's hard to drive forward at the moment," David Price, director of institutional equities at Forsyth Barr said. "The consensus forecasts have been drifting lower, the rubber band can't stretch forever. Against the backdrop of rising interest rates, if you're not getting earnings growth it's hard to see multiples staying where they are. Something's got to give, and it's going to be prices."

Chorus led the index lower, down 2.6 percent to $4.38, while Air New Zealand was down 2.2 percent to $3.49 and Summerset Group Holdings dropped 1.9 percent to $4.70.

Ryman Healthcare was the best performer, rising 1.9 percent to $8.99, while NZX gained 1.8 percent to $1.15.

"It wouldn't be often that NZX is top of the moves. People pick through things that haven't really performed to look for the next thing - a lot of stocks have had a pretty strong run," Price said. "On a relative basis, Ryman has been a big performer having been quite weak of late, it's had a few very strong days. You always pick through the rubble to see what you can find, little pockets of value."

Xero dipped 0.1 percent to $25.86. Shareholders today voted to increase the board's fee pool to $1.4 million from $850,000, which will let the Wellington-based company take on two or three new directors in the UK or potentially the US. Kiwi Property Group was halted at $1.385. Retail investors took up half the shares available to them in their component of a planned $161 million capital raise, which the property investor wants to help fund expansion projects in Auckland. It raised $38 million in the retail component of its one-for-11 pro rata entitlement offer, representing about 50 percent of the 56 million shares available, it said in a statement. 

Outside the benchmark index, Pushpay Holdings was halted at $1.65. The mobile payments app developer is in a trading halt ahead of a $25 million bookbuild, which it says will accelerate its growth, and has raised its annualised committed monthly revenue (ACMR) target to US$100 million.

The company, which is dual-listed on the ASX, also plans to list in the US within the next 36 months, it said today in its first quarter update. It gave guidance of US$70 million in revenue for the 2018 financial year, more than double 2017's US$34 million.


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