MARKET CLOSE: NZ shares fall; regulation threat hits Chorus   7 May 2012

New Zealand shares fell for a third session, led by Chorus which dropped back to its low of the start of the year as investors fretted the regulator may be more aggressive than expected in controlling the telecommunications network company’s charges. Exporter Fisher & Paykel Healthcare rose as the kiwi dollar dropped to a four-month low.

The NZX 50 fell 9.65 points, or 0.3 percent, to 3450.13. Within the index, 32 stocks fell, 11 gained, and seven were unchanged. Turnover was $88.6 million, with Chorus and Telecom alone accounting for $46.2 million.

Chorus sank 6.5 percent to $3.04, extending Friday's 7.7 percent decline after the Commerce Commission indicated it wants to cut the wholesale price of access to its copper lines and left the door open for pricing in other services to come under the regulator's microscope.

“The market is fearful of regulation,” said James Lee, head of institutional equities at First NZ Capital. While the commission view is only a draft determination, the market has been surprised “how aggressively the commission was addressing this issue.”

Telecom rose 2 percent to $2.585. The telecommunications company is Chorus' biggest customer after spinning out the network company as a separate entity last year.

Telecommunications components maker Rakon fell 5.6 percent to 51 cents, while lender Heartland New Zealand fell 5.3 percent to 54 cents.

New Zealand's stock exchange followed a global decline, with markets around the Asia Pacific falling in the wake of weak US employment data on Friday and European election results that throw doubt on the continent's region-wide austerity programme.

That saw riskier assets such as the New Zealand dollar fall, and the local currency dropped to a new three-and-a-half-month low of 79.13 US cents.

That's helped local manufacturers who export their wares, with Fisher & Paykel Healthcare leading gainers as it rose 2.3 percent to $2.27. Fisher & Paykel Appliances rose 1.9 percent to 53.5 cents.

“We’ve definitely seen that with Healthcare – it has been very clear,” Lee said.

The downbeat mood stoked demand for infrastructure stocks, with Infratil gaining 1 percent to $1.96, Auckland International Airport up 1 percent to $2.58 and TrustPower gaining 0.9 percent to $7.60. Port of Tauranga gained 1 percent to $11.31.

Metlifecare sank 6.4 percent to $2.06 after the retirement village operator announced a $216 million cash and scrip deal to buy Vision Senior Living and Private Life Care Holdings. Shareholders in the rival village operators will get $206 million in Metlifecare shares. Vision Senior Living's investors will pay $10 million in cash for more shares which will pay down debt in Metlifecare.


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