MARKET CLOSE: NZ shares fall, as Genesis, AIA, Ebos, Skellerup shed dividend rights

Wednesday 30th September 2015

New Zealand shares fell, dragged down by companies shedding rights to their dividends including Genesis Energy, Auckland International Airport, Ebos Group and Skellerup Holdings. The benchmark index ended the quarter 3.5 percent down.

The S&P/NZX 50 Index fell 19.06 points, or 0.3 percent, to 5593.36. Within the benchmark index, 28 stocks fell, 13 rose and nine were unchanged. Turnover was a bigger than usual $198 million, ending trading in the quarter.

New Zealand stocks went against the trend in trading today, with stocks across Asia following upbeat Northern Hemisphere sessions, as a number of companies shed rights to their upcoming dividend payments, and reducing the immediate value for investors.

Genesis led the benchmark index lower, down 5.9 percent, or 11.5 cents, to $1.83 as the government controlled energy provider gave up rights to its final dividend of 8 cents per share. Auckland Airport, the nation's busiest gateway, declined 2.6 percent, or 13 cents, to $4.88 as it shed rights to its 7.3 cents final dividend. Skellerup, the industrial rubber firm, fell 4.4 percent, or 6 cents, to $1.29 as it shed rights to its 5.5 cent final dividend.

Ebos, the animal and healthcare products firm, slipped 0.2 percent, or 2 cents, to $12.46 as it gave up rights to its final 25 cents dividend, but was the best performer in the quarter up 22 percent. Sky Network Television, the dominant pay-TV provider, fell 2.1 percent to $4.65 and was the worst performer on the benchmark index in the quarter, down 25 percent.

The flood of stocks going ex-dividend "was a reflection of the market in a lot of respects," said Rickey Ward, NZ equity manager at JB Were. "We've gone through a period of reporting, then you get dividends announced at that time and they go ex-dividend. Also at the end of the month and quarter markets tend to go into a bit of a slow down period anyway."

Trading in the quarter was marked by volatile markets as investors weighed the outlook for the US Federal Reserve to hike rates for the first time in a decade, while nervousness about China's growth outlook has spooked traders from equities as an asset class.

"People are speculating around two events - one was 'would the Fed tightening in late September?'," Ward said. "Then you had China come out and start to show signs of a slowdown and that created market volatility. We've had confirmation of both of those events now, so the market should settle down a bit more."

Z Energy was unchanged at a record $6.63, after requesting a trading halt after close yesterday, ahead of a bookbuild where Infratil would sell its 20 percent cornerstone stake for between $6 to $6.20 via a private placement. The New Zealand Superannuation Fund also sold 9.73 percent into the offer. Infratil, the infrastructure investor, rose 0.7 percent to $3.06.

"The company provided guidance a week or so ago and the share price was trading at $5.80, and a week and a half or so later it's at $6.60 and they do a placement - it doesn't look right," Ward said. "Some people are starting to say 'well did somebody know something about this or is this just natural?' - a large share price movement and then all of a sudden you get a placement soon after, you do start to raise questions when that occurs, rightly or wrongly."

Steel & Tube Holdings, the steel manufacturer, was the best performer on the benchmark, up 1.9 percent to $2.67.

Outside the benchmark index, Hallenstein Glasson was unchanged at $3.51. The clothing chain lifted its full-year dividend by 8.8 percent while reporting a 22 percent jump in profit to $17.4 million but warned intense retail competition was eroding margins.

Pumpkin Patch advanced 10 percent to 12.5 cents. The unprofitable children's clothing retailer posted a full-year loss of $9.1 million that included bigger-than-expected provisions against under-performing stores and said it had concluded talks with its bank to extend its debt facilities through the end of 2017.

Pushpay Holdings was unchanged at $6. The mobile payments app developer has raised $18.7 million in a private placement of new shares at $4.88 apiece. Last Thursday, the mobile payment app developer was asked by NZX regulation to explain a one-day surge in its shares of $1, or 17 percent.

BusinessDesk.co.nz

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