MARKET CLOSE: NZ shares fall, led by Summerset as yield play comes off boil; Kathmandu gains

New Zealand shares fell, led by companies often held for their relatively attractive yields including Summerset Group, Ryman Healthcare and property investors. Kathmandu gained after the outdoor clothing chain reported an uplift in third-quarter sales.

The S&P/NZX 50 Index fell 27.43 points, or 0.4 percent, to 7378.41. Within the index, 27 stocks fell, 15 gained and eight were unchanged. Turnover was $125 million.

Summerset led the index lower, falling 2.2 percent to $4.99, rival retirement village operator Ryman dropped 1.4 percent to $8.53 and Metlifecare fell  1.1 percent to $5.63. Some property companies, which are also held for their appealing dividend yield, extended yesterday's declines. Argosy Property fell 1 percent to 99 cents, Vital Healthcare Property Trust dropped 0.9 percent to $2.18 and Stride property declined 0.6 percent to $1.72.

"Yield stocks have been coming off the boil generally this year," said Greg Smith, head of research at Fat Prophets in Auckland. "The reality is interest rates are going up but possibly in the near-term not as fast as people think. It is the same story in the US as well. The Fed kept interest rates on hold this week. Interest rates are going up but they're not going to rush up."

Australia & New Zealand Banking Group extended its decline for a third day since its interim results, falling about 2 percent to $33.20. Westpac Banking Corp dropped 1.4 percent to $36.50. National Australia Bank today said it returned to a first-half profit of A$2.55 billion from a year-earlier result marred by the writedown of the value of UK operations that it exited, and the board declared an interim dividend of 99 Australian cents. 

Genesis Energy declined 1.6 percent to $2.175, Z Energy fell 1.3 percent to $7.63 and Meridian Energy fell 0.9 percent to $2.81. 

Comvita, the honey products company making strong sales in China, fell 1.4 percent to $6.90.

Port of Tauranga declined 1.2 percent to $4.10 and Mainfreight fell 1.1 percent to $22.

Kathmandu was the biggest gainer on the index, rising about 5 percent to $2.12 after reporting a 9.3 percent gain in third-quarter sales, which the outdoor equipment chain said was due to new product lines and better promotions. 

"Retailers have been at a little bit of a low ebb," said Fat Prophets' Smith. 

Vector rose 0.6 percent to $3.29 after the company said it is starting a full roll-out of software that draws on artificial intelligence and machine-to-machine connectivity to manage its network with less intervention by people in what the power and telecommunications lines company says will cut costs and make for more secure infrastructure. 

(BusinessDesk)