MARKET CLOSE NZ shares drift in light trading; A2, Michael Hill fall
New Zealand shares fell in subdued trading as the US budget standoff discouraged investors from making big bets on the direction of markets. A2 Corp and Michael Hill International were among leading decliners while Pumpkin Patch advanced.
The NZX 50 Index fell 17.366 points, or 0.4 percent, to 4738.678. Within the index, 28 stocks fell, 12 rose and 10 were unchanged. Turnover was a lower-than-average $89.6 million.
Bloomberg reported that Japan and China, the two biggest foreign creditors of the US, have expressed concern over the risks that the US defaults on its debts if politicians in Washington can't agree to raise the debt ceiling this month. The Federal government remains in lockdown in the absence of approval for the budget. The Meridian Energy share sale is also diverting attention from the market, traders said.
"Markets have been relatively becalmed over the week, as all attention is on the gridlock in Washington," Derek Rankin, director at Rankin Treasury Advisory, said in a note. "If they don't do a deal then markets look too complacent right now to handle it very well."
A2, the milk marketing company, fell 2.9 percent to 67 cents. Fonterra Shareholders' Fund dropped fell 2.3 percent to $6.92. Jeweller Michael Hill International fell 2.7 percent to $1.42. Auckland International Airport fell 1.4 percent to $3.28.
Sky Network Television fell 0.5 percent to $6.17 even after the Commerce Commission ended its investigation into the pay-TV operator's contracts with internet service providers with just a warning, saying it would cost too much to prosecute for breaches that are not relevant to future behaviour.
Infratil rose 0.4 percent to $2.52. Chairman David Newman has stepped down from the board of the infrastructure investor for a period of medical leave.
Abano Healthcare, the specialist medical investor, fell 2.8 percent to $6.65. The company said today it is calling on a consortium mounting a hostile takeover bid to put a price on the audiology unit it plans to dump for a nominal value if the acquisition succeeds.
The healthcare firm's board has requested the bidders, made up of the company's biggest shareholder and former director Peter Hutson, Australian private equity firm Archer Capital and investor James Reeves, name how much Hutson would pay for Abano's half-stake in Bay International and are offering to buy him out at the same price.
Smartpay held unchanged at a two-year high close of 38 cents, having soared 23 percent yesterday. Fund manager Milford Asset Management this month disclosed a 6.3 percent stake in the restructured eftpos company in a bet it can repeat its New Zealand success in Australia.
"Most people think it's still a terrible company, which is great for an investor," said Brian Gaynor, chairman of Milford's investment committee. "But it is nothing like the company it was. The restructuring has given it a reasonable chance of being successful in Australia."
Pumpkin Patch, the children's clothing chain, rose 5.9 percent to $1.07 and retirement village operator Metlifecare rose 3.6 percent to $3.21 as brokerage Craigs Investment Partners began coverage with a favourable rating.
Fletcher Building fell 0.1 percent to $9.36 and Telecom rose 0.4 percent to $2.31.