MARKET CLOSE NZ shares fall as Meridian float looms; Sky TV, Fonterra drop
New Zealand shares fell, with the NZX 50 Index extending its drop from a record, as investors prepare for the Meridian Energy sale and mull the potential end of US monetary stimulus. Sky Network Television and Fonterra Shareholders' Fund paced the slide.
The NZX 50 fell 29.003 points, or 0.6 percent, to 4701.374. Within the index, 39 stocks fell, seven rose and four were unchanged. Turnover was $117 million.
The government is expected to raise between $1.9 billion and up to $2.3 billion from the sale of 49 percent of Meridian, its largest electricity company, next month in what will be the nation's largest ever initial public offering.
Sky TV fell 0.2 percent to $5.56 and was the most heavily traded stock by value, with about $39 million of shares changing hands. Contact Energy declined 1.3 percent to $5.27.
"Share prices will come back as people move money to prepare for Meridian," said James Lee, head of institutional equities at First NZ Capital. The New Zealand market got a reasonably negative offshore lead and more volatility is expected until it is clear when the Federal Reserve will begin tapering its stimulus programme. "The market is very sensitive currently to changes in macro policy," Lee said.
The Dow Jones Industrial Average tumbled 1.2 percent in New York on Friday.
Fonterra units, which give investors the rights to dividends from the dairy giant, fell 1.2 percent to $7.18 ahead of its full-year results on Wednesday. In July it said earnings would miss last year's prospectus forecast.
Michael Hill International, the Brisbane-based jewellery chain, fell 3.3 percent to $1.49, leading a decline among consumer related companies. Warehouse Group dropped 2.1 percent to $3.76 and Trade Me declined 1.5 percent to $4.62.
Kathmandu, which is scheduled to post its full-year results tomorrow, fell 1 percent to $2.85. Hallenstein Glasson Holdings fell 1 percent to $5 while Pumpkin Patch, which reports on Friday gained about 1 percent to $1.03.
PGG Wrightson, the rural services company fell 2.6 percent to 38 cents after announcing that John Anderson will retire as chairman at the annual meeting next month.
OceanaGold, the operator of the Macraes gold field, fell 6.7 percent to $1.95 and Steel & Tube Holdings dropped 2 percent to $2.88.
Fletcher Building slipped 0.7 percent to $9.51, Auckland International Airport fell 0.8 percent to $3.315 and Telecom gained 0.4 percent to $2.28.