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NZ shares fall in holiday trading, head for 17% annual gain

New Zealand shares fell in subdued holiday trading, putting the NZX 50 Index on route to a 17% annual gain. Xero, the best performer on the index, Fletcher Building and Telecom all declined, offsetting gains among mid-caps such as Hallenstein Glasson Holdings.

The NZX 50 fell 0.575 points, or 0.01 percent, to 4767.360. Within the index, 13 stocks fell, 33 rose and four were unchanged. Turnover was about $30 million, less than a third of its daily average this year.

The NZX 50's advance follows gains of almost 25 percent in 2012, underlining the appeal of equities in a world of record low interest rates, now coming to an end. Xero fell 0.2 percent to $33.15 and has soared 337 per cent this year.

Ryman Healthcare fell 0.8 percent to $7.84 and has rallied 74 percent in 2013, leading gains among retirement village operators. Chorus fell 0.4 percent to $1.43, having shed 51 percent this year.

Meridian Energy receipts rose 0.5 percent to $1.035, ending the year ahead of listing price though down 4.6 percent from their debut. MightyRiverPower rose 1.2 percent to $2.125, not enough to make up for its 20 percent decline in 2013.

"It has been a stunning year for equities and the second year in a row," said Matt Goodson, managing director at Salt Funds Management. "But it hasn't been uniform across the market. This year utilities underperformed and property stocks have fallen as bond yields rose."

Kiwi Income Property Trust rose 1.4 percent to $1.08, heading for a 7.4 percent annual decline. New Zealand 10-year government bonds are yielding about 4.75 percent, up from about 3.66 percent at the start of the year.

Fletcher dropped 2.3 percent to $8.52 and Telecom fell 0.2 percent to $2.335.

Fonterra Shareholders' Fund rose 0.7 percent to $5.79 and has fallen 18 percent this year, even as farmers look forward to record prices amid unwavering global demand. Fonterra Cooperative Group has slashed its forecast 2014 dividend while keeping the farmgate payment at a record high.

The fund "is a play on the margin between what they pay for the milk and what that sells for," Mr Goodson said. The poor performance of the units shows "the tensions in the structure" of the fund.

"It's very difficult balancing the interests of outside investors who don't own shares and the farmers getting the milk price," he said.

OceanaGold rose 5.8 percent to $1.82, the biggest percentage gain on the index. Ebos Group rose 3.8 percent to $9.60. Warehouse Group rose 2.7 percent to $3.85 as Kiwis thronged to the post-Christmas sales at many retailers. Kathmandu rose 1.2 percent to $3.52.

(BusinessDesk)