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MARKET CLOSE: NZ shares fall, led by Meridian, Spark, Fletcher

05 Mar 2015

New Zealand shares fell, led by Meridian Energy ahead of its second instalment receipt coming due in May. Spark New Zealand and Fletcher Building declined.

The NZX 50 Index fell 17.31 points, or 0.3 percent, to 5856.772. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $141 million.

Meridian dropped 4.9 percent to $2.025. The partially privatised energy company listed on the bourse in October 2013, with the shares offered in instalment receipts to sweeten the offer, with $1 upfront and the promise of full entitlement to dividends, and the remaining 50 cents in May 2015. Some investors have been selling the receipts ahead of the second payment to book profit on the 20 percent gain so far this year, brokers said.

"It's had a strong run so there is probably a bit of profit taking," said Mark Lister, head of private wealth research at Craigs Investment Partners. "People might have also remembered they have to front up with another 50 cents a share, for the second instalment in May, so you would expect a bit of weakness to creep in as we get closer to that period, as some people won't want to put any more money in."

Stocks fell across the board as investors who'd bet on a strong earnings season digested the mixed results that were released, Lister said. The benchmark index has advanced 5.2 percent since the start of the year as traders sought income paying equities in a globally low interest rate environment.

Spark, formerly Telecom Corp, fell 1.2 percent to $3.25. Fletcher Building, the construction and building supplies firm, declined 0.9 percent to $8.56. Metlifecare, the retirement village operator, slipped 0.8 percent to $4.76. Contact Energy, the energy company, dropped 1.6 percent to $6.06.

"Markets are due for a breather, which probably in my opinion got a little bit ahead of themselves," Lister said. "Now that reporting season is behind us, there isn't much news flow coming for a little while."

Trustpower rose 0.1 percent to $8.16. The utility company controlled by Infratil said customers that buy electricity and telco services have a much lower rate of churn than those that only buy one service. Infratil rose 0.3 percent to $3.17.

Outside the benchmark index, Briscoe Group rose 1.4 percent to $2.99. The homeware and sporting goods retail chain posted a 17 percent gain in annual profit, in line with its forecast, as it widened margins on more efficient operations.

On the NZ Alternative Index, Chatham Rock Phosphate was unchanged at 1.9 cents. The would-be seabed miner is looking to raise a further $1.25 million as its key staff take pay cuts and the company pursues both legislation changes and a new mining consent under the controversial new law governing economic activity in New Zealand's offshore Exclusive Economic Zone.

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