MARKET CLOSE: NZ shares extend slide as global jitters dent growth stocks; Gentrack, Pushpay drop

Thursday 25th October 2018

New Zealand shares fell for a fifth day as a rout on Wall Street spread into Asian markets, weighing heavily on growth stocks such as software firms Gentrack and Pushpay.

The S&P/NZX 50 index dropped 74.01 points, or 0.9 percent, to 8,568.23. Within the index, 40 stocks fell, three gained and seven were unchanged. Turnover was $138.6 million

New Zealand fared better than markets across Asia, with Australia's S&P/ASX 200 index down 2.2 percent in afternoon trading and Hong Kong's Hang Seng falling 1.7 percent.

US stocks fell overnight, with the tech-heavy Nasdaq falling 4.4 percent amid general unease over global growth and the prospect of higher interest rates. The VIX - Wall Street's fear gauge - rose to 25.23, compared to its 20-year moving average of 13.35.

Local tech companies led the NZX 50 lower on very light volumes. Gentrack dropped 3.5 percent to $6.58 and Pushpay fell 2.8 percent to $3.48. A2 Milk is another momentum stock whose rapid gains in recent years have given it a bigger weighting on the index. It fell 2 percent to $9.90.

"It's not fundamentals driving things at the moment - investors are selling because other equity markets are in decline," said Grant Williamson, a director at Hamilton Hindin Greene.

Freightways fell 2.1 percent to $7.13 on modest volumes after the courier and information management firm said first-quarter revenue was up 8.3 percent. It also affirmed expectations for earnings growth.

Williamson said New Zealand's economic fundamentals are still standing up pretty well.

"There are still good quality companies - they've just got a bit cheaper."

The NZX 50 is still up 2.1 percent so far this year, the only major equities index across Asia-Pacific to still be in the year to date. NZX fell 1.9 percent to $1.04.

Spark New Zealand was the most traded stock, on a volume of 3 million. It fell 0.7 percent to $3.835, while Meridian Energy was down 0.3 percent to $3.07 on more than twice its normal volume. Z Energy fell 0.7 percent to $5.85 on more than three times its average volume.

Air New Zealand dropped 2.4 percent to $2.615 with 1.5 million shares traded, slightly more than usual. Rival Qantas Airways today said first-quarter revenue rose 6.3 percent, helping offset higher fuel costs.

Metlifecare rose 1 percent to $5.91 after buying land to expand its Botany development in Auckland. Rival Ryman Healthcare gained 1.5 percent to $11.77 on almost twice its average volume.

Among other stocks with more than 1 million shares traded, Contact Energy slipped 0.2 percent to $5.52, Fletcher Building was unchanged at $5.71, Sky Network Television slipped 0.9 percent to $2.30 and Mercury NZ declined 1.2 percent to $3.33.

Heartland Bank fell 2.6 percent to $1.52 on a volume of 1.3 million shares, almost four times its 90-day average.

Outside the benchmark index, Steel & Tube fell 2.9 percent to $1.32 after chair Susan Paterson was re-elected at today's annual meeting. Paterson revealed the company had investigated buying Fletcher assets, which was why the board was wary of regulator concerns when it batted away a takeover offer from the larger firm.

Scott Technology was unchanged at $2.90 after reporting a 12 percent increase in operating earnings as it bedded in new acquisitions.

South Port New Zealand was unchanged at $7.40 after affirming expectations for annual profit to fall 10 percent; TeamTalk gained 1.2 percent after affirming flat earnings for the current financial year.

Dual-listed AMP dropped 18 percent to $2.93 on the NZX. The Australian financial services firm will sell its AMP Life unit for A$3.3 billion and plans to spin out its New Zealand wealth management and advisor business as a separately listed company in an initial public offering.

(BusinessDesk)

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