MARKET CLOSE: NZ shares fall as A2 still in the dog-box; Genesis, Akl Airport shed dividend rights

Thursday 4th October 2018

New Zealand shares fell for a fourth day as A2 Milk Co remains out of favour after recent selling by its chief executive and a director. Genesis Energy and Auckland International Airport also declined after shedding rights to dividend payments.

The S&P/NZX 50 index slipped 36.77 points, or 0.4 percent, to 9,257.18. Within the index, 22 stocks fell, 20 gained and eight were unchanged. Turnover was $132.1 million.

A2 Milk led the market lower for a second day, falling 3.4 percent to $10.70, the lowest close in almost two months. The milk marketing firm has been out of favour with investors since new chief executive Jayne Hrdlicka disclosed a share sale, which was followed soon after by director Peter Hinton trimming his holding.

"People are always going to watch this stock like that very, very closely given how strong the run has been," said Mark Lister, head of private wealth research at Craigs Investment Partners. The stock, up 30 percent this year, has fallen almost 9 percent since Hrdlicka's sale was disclosed on Sept. 21, the same day A2 joined the FTSE Russell All World Index.

Genesis Energy declined 3.3 percent, or 8.5 cents, to $2.50 after shedding rights to an 8.6 cents per share dividend. Auckland Airport was down 1.9 percent, or 14 cents, to $7.18, giving up rights to an 11 cent dividend payment. Outside the NZX50, Colonial Motor Co fell 4.3 percent, or 38 cents, to $8.52, shedding rights to a 35 cent dividend.

Summerset Group fell 1.4 percent to $7.64 after reporting a decline in third-quarter sales. The retirement village operator expects sales to recover in the fourth quarter as new units come on stream.

Rival retirement village operators were also down. Ryman Healthcare slipped 0.3 percent to $13.48, Arvida Group fell 0.7 percent to $1.34 and Metlifecare was down 0.5 percent to $6.46.

Interest rate sensitive stocks were weaker after stronger than expected US data pushed US government bond yields to a seven-year high. Mercury NZ fell 0.9 percent to $3.34, Contact Energy declined 0.5 percent to $5.88, Kiwi Property Group slipped 0.4 percent to $1.39 and Meridian Energy decreased 0.3 percent to $3.24.

That rise in US interest rates stoked demand for the greenback, pushing the kiwi dollar to a 30-month low. The weaker currency benefits exporters by making their products cheaper on the international market.

Pushpay Holdings, which derives most of its revenue from North America's faith sector, rose 1.2 percent to $4.10. Fisher & Paykel Healthcare, which generates half its income in US dollars, edged up 0.1 percent to $15.12.

Fletcher Building gained 0.3 percent to $6.50. First NZ Capital affirmed its 'underperform' rating on the stock, saying its bid for Steel & Tube Holdings was opportunistic but in line with its strategy. Steel & Tube rose 1.9 percent to $1.59, still below Fletcher's $1.70 a share offer.

Investore Property posted the biggest gain, up 1.3 percent to $1.57, on small volumes. Trade Me gained 1.2 percent to $5.28.

NZX was unchanged at $1.08 after signing a new memorandum of understanding with the Shanghai Stock Exchange. NZX pushed back against shareholder complaints about the strategy it's pursuing, including its ownership of a funds management unit as a vehicle for earnings growth.

TIL Logistics was unchanged at $1.66. The transport company will expand its heavy haulage with a $19 million cash and scrip acquisition, which is expected to immediately increase earnings.

(BusinessDesk)

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