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New Zealand shares fell as the kiwi dollar's 17 percent gain against its Australian counterpart in the past year hurt companies with businesses across the Tasman, including Kathmandu, SkyCity Entertainment Group and Fletcher Building.
The NZX 50 Index fell 34.242 points, or 0.7 percent, to 4865.159. Within the index, 33 stocks fell, 12 rose and five were unchanged. Turnover was $94 million.
The New Zealand dollar recently traded at 92.69 Australian cents from as little as 79.29 cents a year ago, eroding the value of Australian sales when they're repatriated home. Economists at HSBC say the currencies could reach parity this year as the local economy outperforms Australia's.
Kathmandu, the outdoor clothing chain that counts Australia as its largest market, fell 3.8 percent to $3.32. Brisbane-based jeweller Michael Hill International dropped 2.7 percent to $1.44 and SkyCity, which has casinos and hotels in Darwin and Adelaide, declined 1 percent to $3.85.
Fletcher Building, which counts Australia as its second-largest market, fell 0.8 percent to $8.93 while Ebos Group, which made its biggest ever acquisition in Australia last year, declined 0.4 percent to $9.55. A2 Corp fell 3.3 percent to 88 cents.
"They're hit by a double whammy - the Australian economy looks depressed, so they're earning less because things are slower, and then when they bring those dollars back they're hit by the high kiwi dollar," said Mark Lister, head of private wealth research at Craigs Investment Partners.
Australia & New Zealand Banking Group fell 2.4 percent to $33.30 on the NZX and Westpac Banking Corp fell 1.3 percent to $34.17.
New Zealand Oil & Gas fell 3.6 percent to 80.5 cents and Sky Network Television dropped 2.5 percent to $5.94.
Meridian Energy fell below its issue price of $1, dropping 2 percent to 98 cents and MightyRiverPower fell about 1 percent to $2.08 as investors fretted that a change of government could herald increased regulation of electricity prices. Contact Energy dropped 2 percent to $5.04 and gas and electricity lines company Vector fell 1.9 percent to $2.57.
"Regulatory risk is weighing on those sectors which could be in for attention from a Labour government," Lister said.
Among other companies facing or potentially facing regulatory intervention, network operator Chorus fell 0.7 percent to $1.51.
Diligent Board member Services climbed 9.8 percent to $4.81, leading gainers on the benchmark index, after the governance software developer said it added 145 net new clients in the three months ended Dec. 31, compared to 193 a year earlier. As at Dec. 31 it had 2450 companies and 3,405 boards as clients, with a customer retention rate of 97 percent.
SLI Systems, which offers search engine services to retailers, jumped 13 percent to $2.31 after announcing it had more than 1 billion search queries in December, up 50 percent from a year earlier.
Burger Fuel Worldwide, the NZAX-listed fast food chain franchisor, soared 80 percent to $2.70 after saying it will $5.9 million from a new US investor, Franchise Brands, to help fund its global growth aspirations.