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MARKET CLOSE: NZ shares fall; Chorus and Fisher & Paykel drop while Heartland, Air NZ gain

Monday 30th January 2017

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New Zealand shares dropped, led by Chorus and Fisher & Paykel Healthcare on continued Trump concerns, while Heartland Bank and Air New Zealand rose.

The S&P/NZX 50 Index fell 48.7 points, or 0.7 percent, to 7,085.56. Within the index, 27 stocks dropped, 12 were unchanged and 11 rose. Turnover was $70 million.

"We are very slow today, there's no catalyst at the moment to drive anything," said Peter McIntyre, investment adviser at Craigs Investment Partners. "The market's grinding to a standstill today, until we get some decent corporate news flow - it's not surprising when you have Auckland anniversary that volumes are so light."

Chorus led the index lower, dropping 3.7 percent to $4.07. Along with Northpower, Ultrafast Fibre, and Enable, it has been awarded contracts to extend the nationwide ultrafast fibre network to 151 extra towns. Separately, Chorus said it will extend UFB to a further 169 regions, adding more than 200,000 households and businesses to its network.

"I think there are doubts in the market that it's going to have a negative impact on their copper network, which is still quite a good earner for them. Some analysts still have a bit of doubt whether that's going to be good in the long run," McIntyre said.

Fisher & Paykel Healthcare dropped 1.9 percent to $8.70, extending its losses from last week after US President Donald Trump announced his plan to impose a 20 percent import tariff on Mexican goods to pay for the wall he wants to build. Fisher & Paykel manufactures goods for the American market in the Mexican town of Tijuana.

"Again it's concern about what's happening with regards to the state of play with imports into the US from Mexico. It's had a good run over the past three or four years, so some investors are taking some money off the top, admittedly on low volumes," McIntyre said.

Argosy Property shed 1.9 percent to $1.025, Spark New Zealand dropped 1.7 percent to $3.535, and Metlifecare declined 1.6 percent to $5.51. 

Heartland Bank was the best performer, up 1.3 percent to $1.56, while Air New Zealand gained 1.2 percent to $2.16 and Stride Property rose 1.1 percent to $1.79.

NZX was unchanged at $1.11. The shares have been reiterated as 'outperform' by brokerage First NZ Capital, which raised its earnings forecasts for 2017 and 2018 primarily to reflect the market operator's sale of the unprofitable Clear Grain Exchange. First NZ analyst Greg Main raised his target price for NZX to $1.17 from $1.12 in the report.

Outside the benchmark index, Hellaby Holdings was unchanged at $3.58. ASX-listed auto firm Bapcor edged closer to its takeover of Hellaby, lifting its holding to just below the 90 percent level that will allow it to compulsorily acquire the remaining shares. Bapcor has already declared its $3.60-per-share offer, which closes on Feb. 7, unconditional.

G3 Group was unchanged at 62 cents. The NXT-listed mail operations and document manager was ahead of its annual margin targets in the third quarter of its financial year, though it remains behind on its inventory turnover target.

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