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MARKET CLOSE: NZ shares fall; Goodman placement sees property stocks sold

Thursday 19th September 2019

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New Zealand shares fell, with heavy trading in property stocks as investors cleared their books to make way for a $150 million placement in Goodman Property Trust. 

The S&P/NZX 50 Index declined 93.18 points, or 0.9 percent, to 10,774.85. Within the index, 22 stocks fell, 19 rose, and nine were unchanged. Turnover was $106.7 million, of which $11.9 million came from Kiwi Property Group, Stride Property, and Precinct Properties New Zealand. 

Trading in Goodman Property Trust was halted while the industrial property investor raised $150 million at $2.10 a unit in a placement to institutional investors. It will raise up to $25 million more in a retail offer to existing investors. The units closed at $2.195 yesterday. 

"When the share price is high it is a good time to be raising. I would imagine it's gone pretty well, the track record is solid, the assets are very well regarded," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"The question is will there be digestion issues for the stock after what is a substantial placement? That might result in some short-term share price pressure."

McCarthy said portfolio managers often sell down other holdings when a placement like Goodman's occurs.  

Other property stocks came in for some heavy trading, with Kiwi Property down 2.1 percent at $1.615 on a volume of 3.7 million shares. That made it the day's most traded stock, at more than twice its 90-day average of 1.7 million shares. 

Stride fell 0.9 percent to $2.28 with 1.6 million shares traded, and Precinct increased 0.6 percent to $1.80 on a volume of 1.3 million shares. Property For Industry slipped 1 percent to $2.37 with 703,000 shares changing hands. 

A2 Milk led the market lower, down 3.9 percent at $13.70 on a volume of 1.2 million shares, more than its 798,000 average. The milk marketing firm hasn't enjoyed the same boost as other infant formula companies since ASX-listed Bellamy's Australia received a A$1.5 billion takeover offer. A2 closed at a six-month low today.

"I'm a little surprised to see A2 hit the way it has been. I would have thought Bellamy's take-out would have lent more support to a top performer like A2 than it has been," McCarthy said. 

Synlait Milk gave up some of its recent gains, down 2.1 percent at $9.30 and Fonterra Shareholders' Fund dipped 0.3 percent to $3.20. 

Kathmandu Holdings jumped 6.8 percent to $2.98, its highest close since October. The retailer reported earnings at the top end of its upgraded guidance, with a stand-out performance from its Oboz footwear unit in the US. Some 661,000 shares changed hands, more than its 175,000 average. 

Stocks across Asia were mixed, China's Shanghai Composite Index up 0.3 percent in afternoon trading, Australia's S&P/ASX 200 Index down 0.3 percent and South Korea's Kospi 200 index rising 0.6 percent. McCarthy said New Zealand's market initially followed a strong lead from Northern hemisphere trading but tapered off through the session. 

Of other companies trading on volumes of more than a million shares, Spark New Zealand rose 1 percent to $4.52, Arvida Group was unchanged at $1.43, and Meridian Energy fell 1 percent to $5.10. Auckland International Airport was down 1.8 percent at $8.96, the first time it's closed below $9 since mid-June. 

Refining NZ was unchanged at $2.10 after reporting its highest processing margin in 18 months. 

Outside the benchmark index, several companies held their annual meetings. Of those, Evolve Education rose 5.5 percent to 11.5 cents, New Talisman Gold Mines was up 13 percent at 0.9 of a cent, Turners Automotive Group climbed 8.3 percent to $2.60, and Blackwell Global Holdings was unchanged at 0.5 of a cent. 


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