MARKET CLOSE: NZX 50 mixed at the start of election week; NZ Refining, Air NZ fall on pipeline leak

Monday 18th September 2017

New Zealand shares were little changed at the start of election week. New Zealand Refining and Air New Zealand dropped following a pipeline leak, while A2 Milk Co rose.

The S&P/NZX 50 Index fell 3.95 points, or 0.05 percent, to 7,758.71. Within the index, 17 stocks fell, 15 rose and 18 were unchanged. Turnover was $131 million.

"People are a little more cautious and happy to wait for certainty," said Grant Davies, investment adviser at Hamilton Hindin Greene. "There are people sitting on their hands, though companies on the NZX are going to keep trucking along no matter what government is in place. Perhaps we will see some volatility early in next week, we could be in for a few weeks of to-ing and fro-ing" as a coalition is negotiated.

New Zealand Refining dropped 3.6 percent to $2.39, while Air New Zealand stock fell 1.1 percent to $3.215. A pipeline leak has disrupted jet fuel supplies at Auckland International Airport. Davies said investors were seeing the leak as a one-off and had taken it in their stride, with Auckland International Airport up 1.3 percent to $6.39 today.

Whangarei-based NZ Refining expects to miss out on between $10 million and $15 million of pipeline and refining income as it works to repair the leak on its pipeline between the Marsden Point refinery and the Wiri storage depot. Thirty people have been working on a 24-hour basis over the past four days and have recovered most of the jet fuel from the leak site, it said.

Air NZ said it estimates about 2,000 of its own customers will be affected today. The shutdown is limiting available jet fuel to about 30 percent of normal usage. The airline said the disruption isn't likely to have a material impact on earnings.

Fisher & Paykel Healthcare led the index lower, down 4.4 percent to $12.29.

"They're really just getting back to where they were two weeks ago. It's probably just a bit of profit-taking, it had got a bit ahead of itself," Davies said. "There was a bit of buying as its earnings aren't too exposed to the election cycle. Last week there were massive volumes going through, perhaps there was just a motivated buyer who got their desired exposure and now there's no-one to catch the sellers as they come out."

A2 Milk was the best performer, gaining 2.5 percent to $5.84. The stock has gained 168 percent this year but had been falling back from the record $6.12 it reached a week ago. Kiwi Property Group rose 1.9 percent to $1.345 and Vector gained 1.9 percent to $3.30.

Outside the benchmark, NZ Oil & Gas rose 3.5 percent to 75 cents. OG Oil & Gas, the oil and gas arm of the Ofer Global Group, has formalised its partial takeover offer for NZOG after the New Zealand energy explorer rejected an "inadequate" partial offer from ASX-listed Zeta Resources.

OGOG is offering 77 cents a share for a maximum 70 percent of NZOG, above Zeta's 72 cent offer but still below the 78 cent-to-93 cent range in a valuation NZOG's independent directors commissioned from Northington Partners ahead of rejecting Zeta's proposal.

(BusinessDesk)

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