Sharechat Logo

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower

Friday 18th October 2019

Text too small?

New Zealand shares fell, led by blue-chip stocks such as Meridian Energy and A2 Milk Co, as weaker than expected Chinese growth weighed on Asian markets. 

The S&P/NZX 50 Index dropped 74.74 points, or 0.7 percent, to 11,067.12. Within the index, 25 stocks fell, 19 rose, and six were unchanged. Turnover was $137.1 million. 

Stocks across Asia fell after China said gross domestic product grew at an annual 6 percent pace in the third quarter, its slowest pace in almost 30 years and falling short of economists' 6.1 percent forecast. China's Shanghai Composite Index was down 0.6 percent in afternoon trading, Australia's S&P/ASX 200 Index also fell 0.6 percent, and Singapore's Straits Times Index declined 0.4 percent. 

Meridian, New Zealand's biggest listed company, led the local market lower, down 2.2 percent at $5.28 on a volume of 2.9 million shares, more than its 90-day average of 1.4 million. It's been the best-performing stock on the NZX50 so far this year, up 56 percent, with investors attracted to the reliable dividend income in a low interest rate environment. 

Among other blue-chip stocks, A2 was down 2.1 percent at $13.07, Ryman Healthcare declined 1.8 percent to $13.30, Fisher & Paykel Healthcare decreased 1.3 percent to $18.75 and Contact Energy slipped 1.2 percent to $8.45 on a volume of 2.8 million shares. 

SkyCity Entertainment Group edged up 0.3 percent to $3.94 after telling shareholders that there had been a positive start to the new financial year, particularly at its Auckland gaming machines. 

Matt Goodson, a managing director at Salt Funds Management, said trading appeared to be going okay for the casino operator, which he said was surprising given its past sensitivity to a slowing economy.

"Despite a plethora of signs of a weaker economy, things seem to be hanging in there well for SkyCity," he said. 

Sanford was up 2.7 percent at $7.15 after the seafood group said there had been promising trial results for its greenshell mussel breeding programme. Goodson said that wouldn't deliver any benefits tomorrow, but could be quite significant over the next five years. 

Synlait Milk posted the day's biggest gain, up 2.9 percent at $9.70 on a volume of 67,000 shares, just below its 82,000 average. 

Sky Network Television was the most traded stock on a volume of 3.7 million shares, more than three times its 1.1 million average. It was unchanged at $1.07. 

Goodson said investors were divided on the company, with some seeing strong upside since it secured the rugby broadcasting rights, and just as many seeing a similar downside in a changing content environment. 

Spark New Zealand, which has been an aggressive competitor for sports rights, rose 1.1 percent to $4.49 on a volume of 2.4 million shares, less than its 3.1 million average. The telco today said it would promote Stefan Knight to chief financial officer from next March, with David Chalmers to return to Melbourne. 

Mercury NZ rose 0.4 percent to $5.48 on a volume of 1 million shares, more than its 784,000 average. The electricity generator-retailer lifted earnings guidance due to rising storage at its Waikato catchment and sustained high wholesale electricity prices. 

Among other stocks trading on volumes of more than a million shares, Fletcher Building fell 0.4 percent to $4.82, and Infratil was down 0.5 percent at $4.92. 

Goodson said there was speculation Fletcher will fall out of an MSCI index and Mercury will be added in the November reweighting, which had supported Mercury's price. Contact was also a chance of being added, he said. 

Kathmandu Holdings fell 1.3 percent to $3.14 on a volume of just 92,000 shares, less than a third of its 301,000 average. Shareholders today overwhelmingly backed the $368 million acquisition of Rip Curl. 

Outside the benchmark index, Eroad rose 4.6 percent to $3.17 after the fleet management technology company said third-quarter sales were strong, and that it's considering a secondary listing on the ASX. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Tobacco is not essential for life - ARFNZ
Coronavirus Shows Cash Is King, Even for Biggest U.S. Companies
Stocks Keep Rising After Dow's Best Day in 87 Years
Kudlow Projects Coronavirus Aid Package to Reach $6 Trillion
Beware, Asia Stock Rallies Can Be Just Bear-Market Bounces
Dow Surges Most Since 1933 on Stimulus Deal Hopes
Dow Surges Most Since 1933 on Stimulus Deal Hopes
NZ dollar rebounds on central bank, govt moves to calm markets
Gold Rallies as Goldman Sees Inflection Point After Sell-Off
Australia Passes Massive Stimulus Measures as Virus Spreads

IRG See IRG research reports