MARKET CLOSE: NZ shares fall; Spark, Scales drop while Orion, Tower bounce

Friday 9th December 2016

New Zealand shares fell, led lower by Spark New Zealand and Scales Corp, while Orion Health Group rose from its record low.

The S&P/NZX 50 Index dipped 22.71 points, or 0.3 percent, to 6,893.3. Within the index, 24 stocks fell, 22 rose and five were unchanged. Turnover was $155.8 million.

"The local market has underperformed somewhat today, bucking the trend of offshore markets," said Grant Williamson, director at Hamilton Hindin Greene. "It looks a bit tired for the end of the week - a bit of profit taking in place, possibly the political scene does create a little more uncertainty for next year as we head into another general election but there's a lot of water to go under the bridge yet."

The best performer on the index was Orion Health, which gained 13.3 percent to $1.96, after hitting a record low of $1.65 on Wednesday.

"It's a major reversal, it had a key reversal day yesterday which means when it makes a new all-time low and then closes above the previous day's close, it's a sure sign it is going to make a pretty big short-term bounce, and that's exactly what we've seen today," Williamson said. "We did see a pretty large cross go through the market yesterday as well, which I think reduced the selling quantity and there was one main seller in the market that was pushing that stock down for thirteen, fourteen days in a row so it was certainly a turning point there yesterday. It'll be interesting to see what the stock does from these levels - it's down 46 for the year, following on from last year when it was down 45 percent, so it's been a bit of a shocker really."

Spark New Zealand was the worst performer, down 2.8 percent to $3.435, while Scales Corp dropped 2.7 percent to $3.29 and Vista Group International fell 2.4 percent to $5.80.

Tower gained 3.7 percent to 84 cents and Kathmandu Holdings advanced 1.6 percent to $1.93.

Fletcher Building rose 1.7 percent to $10.73, and has gained 4.6 percent this week and 43.5 percent this year.

"It keeps coming in for good demand, I think it's one stock investors will be paying pretty good attention to next year with a lot of rebuilding in Wellington CBD and the Auckland residential scene as well," Williamson said. "From an investor point of view, it's sitting in a pretty sweet spot at the moment."

Sky Network Television was unchanged at $4.80.

There's a new bill in front of Parliament at the moment regarding major sporting events being given free-to-air access which would probably have a pretty serious effect on Sky TV, if that was to go through," Williamson said. "That doesn't get voted on until early in the new year, but I think investors will be keeping a pretty close eye on what happens there."

Outside the benchmark index, Abano Healthcare Group fell 1.2 percent to $8. The company said it received notice that Healthcare Partners Holdings, associated with Peter and Anya Hutson and James Reeves, has sent its partial takeover offer to Abano shareholders. The board said the partial nature of the offer wasn't in shareholders' best interests and advised shareholders to wait.

Burger Fuel Worldwide was unchanged at $1.49. The fast food retailer narrowed its first-half loss to $115,328 and says it wants to buy more stores and is still looking to expand into the US though its sales and option and collaboration agreements with investor Franchise Brands have ended. The company has 51 stores operating in New Zealand where it's the third largest burger concept in the market.

Cooks Global Foods was unchanged at 9 cents. The Esquires Coffee chain franchise rights owner doubled its first-half loss to $3.8 million and says it's in negotiations with its Chinese shareholders about raising equity to fund growth.

Mercer Group gained 13.3 percent to 1.7 cents. The unprofitable stainless steel fabricator has issued 130.8 million new shares at 1 cent each to fund its purchase of the assets and business of Hastings-based Haden & Custance.

BusinessDesk.co.nz

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