Market close: NZ shares fall, Chorus hurt by regulation threat
BUSINESSDESK: 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 company’s charges.
Exporter Fisher & Paykel Healthcare rose as the kiwi dropped to a 3½-month low.
The NZX 50 fell 9.65 points, or 0.3%, 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 $46.2m.
Chorus sank 6.5% to $3.04, extending Friday's 7.7% 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% to $2.585. The company is Chorus' biggest customer after spinning out the network company as a separate entity last year.
Telecommunications components maker Rakon fell 5.6% to 51 cents, while lender Heartland New Zealand fell 5.3% 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 3½-month low of 79.13 US cents.
That has helped local manufacturers who export their wares, with Fisher & Paykel Healthcare leading gainers as it rose 2.3% to $2.27.
Fisher & Paykel Appliances rose 1.9% to 53.5 cents.
“We’ve definitely seen that with Healthcare – it has been very clear,” Mr Lee said.
The downbeat mood stoked demand for infrastructure stocks, with Infratil gaining 1% to $1.96, Auckland International Airport up 1% to $2.58 and TrustPower gaining 0.9% to $7.60. Port of Tauranga gained 1% to $11.31.
Metlifecare sank 6.4% 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 $206m in Metlifecare shares.
Vision Senior Living's investors will pay $10m in cash for more shares which will pay down debt in Metlifecare.