MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop

Saturday 15th December 2018

New Zealand shares fell as uncertainty over the global economy and US-China trade tensions pushed Asian markets lower. Exporters Fisher & Paykel Healthcare, A2 Milk and Comvita all declined.

The S&P/NZX 50 index decreased 70.66 points, or 0.8 percent, to 8,722.51. Within the index, 23 stocks fell, 21 gained, and six were unchanged. Turnover was $195.6 million, of which Trade Me accounted for $90.6 million.

Strained trade relations between the US and China and the prospect of higher US interest rates have prompted investors to reassess their exposure to equities if slowing global growth and tighter credit conditions restrict corporate profits. Stocks across Asia fell, with Australia's S&P/ASX 200 index down 0.9 percent in afternoon trading. Hong Kong's Hang Seng index fell 1.4 percent, in what's been increasingly volatile markets.

"Investors are still a little bit nervous about what's happening on the trade front in particular," said Grant Williamson, a director at Hamilton Hindin Greene.

F&P Healthcare led the market lower, down 4.2 percent to $11.85 in average trading. A2 Milk fell 3.4 percent to $10.75 and Comvita declined 3.3 percent to $5.28, both on light volumes.

Trade Me slipped 0.2 percent to $6.32 on a volume of 14.4 million shares, compared to a 90-day average of 534,000. The online marketplace's board has entered into a scheme of arrangement with UK private equity firm Apax Partners, who will pay $6.45 a share if shareholders agree.

Williamson said it's close enough to the takeover price that some investors are willing to take the money now rather than wait until next year, whereas buyers will be seeking some arbitrage or hoping another bidder comes out of the woodwork.

Outside the benchmark index, Methven soared 32 percent to $1.52 after receiving a takeover offer from ASX-listed GWA Group at $1.60. The deal is also through a scheme of arrangement, and the Australian firm will also let Methven pay an interim dividend for the six-month period ending Dec. 31.

Williamson said the deal was good for investors, but not so much for the broader market.

"We're going to lose another company from the NZX and you're left wondering if it's a case of turning the lights off if you're the last one to leave - it's not good."

NZX was unchanged at $1.

Spark New Zealand fell 1.4 percent to $4.25 on slightly heavier trading than usual at 3.3 million. Meridian Energy rose 1.5 percent to $3.40 on a volume of 2.1 million.

Of other companies trading on a volume of one million or more shares, Kiwi Property Group declined 1.1 percent to $1.345, Auckland International Airport was down 1.8 percent at $6.97, Z Energy rose 1.2 percent to $5.80, and Contact Energy gained 1.4 percent to $5.88.

Fletcher Building fell 1.4 percent to $4.84 as investors continue to wait for news on the sale of its Formica international business.

Infratil declined 1.4 percent to $3.57 after saying a delay to the sale of its Longroad Energy asset won't affect earnings guidance. Separately, it also plans to invest A$50 million in its Canberra Data Centres unit.

Kathmandu Holdings rose 3.7 percent to $2.80 in light trading, posting the biggest gain on the NZX50 on the day.

Scales Corp increased 1.2 percent to $4.27 after buying a 60 percent stake in US petfood firm Shelby JV for US$23.2 million, and saying it plans to fund the company's growth aspirations.

(BusinessDesk)

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