MARKET CLOSE: NZ shares fall a second day as dollar weakens   30 Jan 2015

MARKET CLOSE: NZ shares fall a second day as dollar weakens; Spark drops

By Jonathan Underhill

Jan. 30 (BusinessDesk) - New Zealand shares fell for a second day as the kiwi dollar's slide to a four-year low sapped overseas investor appetite for high-yielding stocks such as Spark New Zealand and MightyRiverPower. Orion Health Group and Wynyard Group fell after a lag in sales.

The NZX 50 Index fell 15.818 points, or 0.3 percent, to 5,743.995. Within the index, 24 stocks fell, 15 rose and 11 were unchanged. Turnover was $134 million.

The benchmark index has retreated from the record high reached two days ago, which had been spurred by investors demand for dividend yields on New Zealand stocks in the face of global low interest rates. Those offshore investors now face the risk of a continued slide in the kiwi dollar that would erode the value of their holdings.

Spark, the phone company formerly known as Telecom, dropped 1.8 percent to $3.30 and MightyRiverPower declined 1.5 percent to $3.36. Among other companies that had attracted investors with their reliable dividend streams, Genesis Energy fell 1.3 percent to $2.24 and Meridian Energy fell 0.8 percent to $1.915.

"We've been seeing a reasonable amount of foreign buying," said Grant Williamson, a director at Hamilton Hindin Greene. "Those buyers have now stepped back - what they make on stocks they lose on the currency. Spark had a great run up but that buying support has disappeared somewhat and profit-takers are back in the market."

Williamson said given the strong rally in the local bourse, the looming earnings season "is going to have to be pretty positive."

"There's not too much room for disappointment," he said. "Maybe there's now more downside than upside risk."

Fletcher Building, the nation's biggest building products and construction group, fell 1.4 percent to $8.38. Fisher & Paykel Healthcare, a beneficiary of a higher currency, snapped a three-day advance to fall 1.6 percent to $6.21.

A2 Milk, the milk marketing company, declined 3.6 percent to 54 cents, leading the index lower. Diligent Board Member Services fell 1.6 percent to $5.50.

Retirement village operator Summerset Group fell 1.6 percent to $3.10.

Outside of the benchmark index, Orion Health Group shares fell 13 percent to $5.29, a record low, after the healthcare management software developer said delays in settling contracts and paying bills in North America will weigh on second-half revenue.

Wynyard Group, the security software firm, fell 2.7 percent to $2.14 after saying 2014 annual revenue lagged its forecast as negotiations on a few key contracts dragged into the next financial year. GeoOp, whose software allows mobile businesses such as builders to manage their workforce, fell 7.7 percent to 60 cents. The company today named Ben Foote as chief executive, replacing Leanne Graham, who resigned in September to take a new role leading the company’s push into the US.

(BusinessDesk)

Add a comment