MARKET CLOSE: NZ shares fall in global selloff; Orion, Westpac, ANZ decline

Wednesday 23rd September 2015

New Zealand shares fell in a global selloff driven by concerns Chinese economic growth is slowing. Orion Health Group, Westpac Banking Corp and Australia & New Zealand Banking Group declined.

The S&P/NZX 50 Index fell 42.45 points, or 0.7 percent, to 6564.34. Within the index, 35 stocks fell, eight rose and seven were unchanged. Turnover was $123 million.

Markets across Asia fell, after Chinese manufacturing data fell to the lowest level in 6.5 years. There is concern growth in China, the world's second-largest economy, is faltering, which may have wider implications for global growth. Last week, the Federal Reserve kept US interest rates near zero, saying "recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term".

Australia's S&P/ASX 200 Index fell 2 percent in afternoon trading while China's Shanghai Composite Index dropped 2.2 percent.

Dual-listed stocks fell. Orion, the healthcare management software, fell 4.4 percent to $3.44. Westpac declined 3.4 percent to $33.67. ANZ dropped 3.1 percent to $30.30. Ryman Healthcare, the retirement village operator, slid 2.3 percent to $7.21. Xero, the cloud-based accounting software firm, declined 2.2 percent to $14.15.

"People are still focusing on China - markets took a turn for the worse after the manufacturing PMI came out," said Mark Lister, head of private wealth research at Craigs Investment Partners. "There's general uncertainty about growth following the Federal Reserve last week, which probably did more harm than good. They probably thought they were doing us a favour by keeping interest rates unchanged but it just created a whole raft of uncertainty because the market has thought well if you're worried about things maybe we should be too."

Adding to the weakness, several companies shed rights to their dividends. Spark New Zealand, the telecommunications company, led the benchmark index lowering dropping 4.6 percent, or 15 cents, to $3.09 as it went ex-dividend for its final 11 cents per share dividend. Fletcher Building, the building and construction firm, declined 2.5 percent, or 18 cents, to $7.04, as it gave up rights to its final 19 cps dividend.

Outside the benchmark index, Delegat Group, the winemakers, fell 1.9 percent, or 10 cents, to $5.20 as it went ex-dividend for its 11 cps final dividend. Hellaby Holdings, the diversified investor, declined 4.1 percent, or 13 cents, to $3.08 as it shed rights to its 12.5 cps final dividend. Michael Hill International, the jeweller, was unchanged at 91 cents after giving up rights to its 2.5 cps final dividend.

Z Energy, the service station chain, was the best performer on the benchmark index, advancing 2.9 percent to $6.31. It said it expects greater benefits than previously forecast from its proposed acquisition of Chevron New Zealand's service stations and says it is running on schedule to integrate the business if it gets approval from the antitrust regulator. Separately, Z affirmed its annual guidance.

DNZ Property Fund, which is rebranding as Stride Property, was unchanged at $2.075. It has entered into a deal to buy a supermarket property portfolio for $287 million, and will help fund the acquisition by raising up to $129 million of new capital.

Restaurant Brands, the fast food chain operator rose 1.3 percent to $3.83. It boosted first-half sales 13 percent to $210 million on an increase in sales of fried chicken at KFC and more Carl's Jr stores.

Sky Network Television fell 2.1 percent to $4.76. The country's dominant pay-TV operator will ask shareholders to lift the pool of directors' fees 27 percent for a slimmed-down board, saying it needs to pay more to attract and retain quality members.

Outside the benchmark index, Trilogy International rose 8.6 percent to $1.65. The skincare products and scented candle maker said its debt would reach $39 million in the first half ending this month, following the $37 million acquisition of privately-held fragrance and cosmetic distributor, CS Company.

BusinessDesk.co.nz

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