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MARKET CLOSE: NZ shares fall, rounding out 18% annual gain led by Chorus

New Zealand shares fell on the last day of 2014, rounding out an 18 percent annual gain that was led by telecommunications network operator Chorus, which rebounded after being punished over the threat of regulation in 2013. Air New Zealand led decliners on the day.

The NZX 50 Index fell 8.918 points, or 0.2 percent, to 5568.283. Within the index, 20 stocks fell, 20 gained, and 10 were unchanged. Turnover was $49.6 million, compared to a daily average $162 million in November. The annual gain adds to last year's 17 percent advance, and 2012's 24 percent increase. The benchmark index reached an intraday record 5599.033 on Dec. 30.

New Zealand's stock market has been an attractive destination for foreign investors seeking bigger returns, with the country's 2014 growth forecast at about 3.5 percent, compared to 2.4 percent for the US and 2.5 percent for Australia while the central bank's official cash rate of 3.5 percent compares to zero to 0.25 percent for the Federal Reserve, zero to 0.1 percent for the Bank of Japan and 2.5 for the Reserve Bank of Australia.

"After what was a pretty good 2012 and 2013, I don't think many people were predicting at the start of the year gains like what we've experienced," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "The addition of some nice companies on the market in the past year has given investors more selection."

Chorus rose 0.4 percent to 2.66, rounding out an 85 percent gain this year. The telecommunications company bounced back from 2013 after it embarked on a series of cost-cutting measures in response to regulation that threatened to poke a hole in its earnings stream, and benefited from the Commerce Commission softening its stance on how much to set Chorus's regulated prices.

Meridian Energy 0.6 percent to $1.76, gaining 73 percent this year. The partially privatised power company benefited from the re-election of the National-led government in September, which removed the threat of new regulation promised by opposition parties. MightyRiverPower increased 0.3 percent to $2.98, and gained 42 percent this year, while Genesis Energy advanced 0.9 percent to $2.17, and was up 19 percent in 2014.

Xero was the worst performer on the year, gaining 0.5 percent to $16.15 today, and taking its annual decline to 50 percent. The cloud-based accounting software developer tumbled from a peak of $44.98 in March after it was caught in a global sell-off of software and biotech companies, and as investors questioned its ability to break into the US market.

Fletcher Building was unchanged at $8.30 today, and declined 2.5 percent this year as its earnings were weighed down by a slowing Australian economy, where it derives a large portion of income. Spark New Zealand, the former Telecom Corp, fell 0.2 percent to $3.115 today, rounding out a 35 percent gain in 2014.

Air New Zealand led the benchmark index lower today, falling 3.1 percent to $2.47. The stock rose 58 percent this year, benefiting from cheaper jet fuel on falling oil prices. Retirement village operator Summerset Group fell 2.1 percent to $2.77 percent, and was down 15 percent this year.

Steel & Tube Holdings was the biggest gainer on the day, up 2.1 percent to $2.91, and taking its annual decline to 4.6 percent.

Outside the benchmark index, Finzsoft Solutions was the biggest gainer on the year, up 850 percent to $3.99. The software developer, which faces a takeover by its managing director Andrew Holliday in conjunction with Singapore-listed IT firm Silverlake Axis, has been overhauling its business in recent years, and signed a new contract that was set to more than quadruple annual earnings in 2015.

Bathurst Resources was the biggest decliner in the year, falling 86 percent to 3 cents as the would-be coal miner scaled back its operations to wait for global coking coal prices to improve.