MARKET CLOSE: NZ shares fall; Meridian declines on Tiwai jitters

Monday 13th July 2015

New Zealand shares fell, led by power companies including Meridian Energy and MightyRiverPower as uncertainty over the future of the Tiwai Point smelter continues to weigh on investment decisions.

The S&P/NZX 50 Index declined 18.64 points, or 0.3 percent, to 5706.7. Within the index, 27 stocks fell, 13 rose and 10 were unchanged. Turnover was $121 million.

Utility companies fell as investors wait for a decision on whether the Tiwai Point aluminium smelter, which uses a seventh of the country's energy and is contracted to Meridian, will remain open or seek to change it existing power arrangements. Owner New Zealand Aluminium Smelters was due to make a decision at the start of July, but has since pushed that out until early August.

Meridian led the benchmark lower, down 3 percent to $2.075. MRP declined 0.4 percent to $2.825. Genesis Energy fell 0.3 percent to $1.695. Contact Energy was unchanged at $4.91.

"I think that is weighing on it a little bit," said Grant Williamson, director at Hamilton Hindin Greene. "We will know next month just what is going to happen there."

Local investors remained cautious after the uncertainty surrounding Greece and its debt crisis and a sharp correction on Chinese stock exchanges saw widespread selling of risk-sensitive assets in recent weeks. Traders are less confident that a deal between Greece and its creditors will be reached after no agreement was secured at weekend meetings.

"There's a bit of nervousness out there," Williamson said. "Something is going to happen with Greece in the very short-term by the looks of things, but also the Chinese market is still of concern as well. Investors have decided to take a few profits on the day."

Chorus, the telecommunications network operator, fell 2.3 percent to $2.775. Argosy Property, the listed property investor, declined 0.9 percent to $1.08. Ebos Group, the pet care and pharmaceuticals business, dropped 1 percent to $10.15. SkyCity Entertainment Group, the casino operator, retreated 2.2 percent to $4.10.

Trade Me Group, the online auction site, declined 2.1 percent to $3.22, its lowest level since March 2012.

Of the day's few gainers, Kathmandu Holdings, the outdoor adventure firm under a takeover bid by Briscoe Group, was the best performer, up 1.9 percent to $1.65. Briscoe, the homeware chain controlled by Rod Duke, was unchanged at $2.70.

A2 Milk Co, the milk marketing business, rose 1.4 percent to 74 cents.

Auckland International Airport, the nation's busiest gateway, declined 0.4 percent to $5.14. Spark New Zealand, formerly Telecom Corp, fell 0.4 percent to $2.775. Fletcher Building, the construction and building supplies firm, rose 0.4 percent to $7.88.

BusinessDesk.co.nz

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