Market close: Shares fall for third day - OceanaGold tumbles, Chorus trends up
New Zealand shares fell, led by OceanaGold, after the gold miner sold shares at a discount to repay debt. Chorus halted its two-day, 18.5% slump driven by the threat of regulated prices.
The NZX 50 Index fell 8.44 points, or 0.2%, to a two-week low close of 4007.24. Within the index, 19 stocks rose, 18 fell and 13 were unchanged. Turnover was $130 million.
OceanaGold, whose interest range from the Macraes gold field in Central Otago to its Didipio project in the Philippines, fell 12.2% to $3.60 and its ASX-listed shares dropped 14% to $2.825.
The company raised $C93.3 million, selling 30 million shares for $C3.11 apiece or $A3 per ASX-listed CHESS Depository Interest. The CDIs were at $A3.27 yesterday.
The sale "was at a discount" and that's weighed on the stock today, says James Smalley, a client adviser at Hamilton Hindin Greene.
Some existing investors may have paid for the new entitlement by selling their old shares, he added.
Chorus, the network company spun off from Telecom last year, rose 0.4% to $2.79, snapping a two-day slide.
A draft determination from the Commerce Commission on access charges could slash annual pretax earnings as much as $160 million, the company said this week.
The government has hinted it may water down the regulator's position.
"One would hope it has built a bit of a base at these levels," Mr Smalley says. Still, "the one thing that's not going to be removed from the stock any time soon is that ongoing uncertainty".
A number of Chorus investors were previously holders of Telecom, where their experience of regulation was "nothing short of hideous".
Xero, the cloud-based accounting service, rose 2.9% to $7.20, the biggest percentage gain on the NZX 50, having fallen from a record high yesterday.
"There were always going to be a bit of profit taken" given the gains, Mr Smalley says.
"The market's willing to wear that you have to spend money to make money" he said of Xero's plan to grow sales at the expense of short-term profit.
Hallenstein Glasson Holdings, the clothing retailer, was unchanged at $5.08 after telling shareholders at the annual meeting today that sales in the first four months of the year are up 7% and profit is tracking ahead of the same period a year ago.
Postie Plus Group tumbled 17% to 20 cents after saying there is a risk it has breached its bank covenants. Still, just 9000 shares changed hands.
Units of the Fonterra Shareholders' Fund fell 2.2% to $6.60, the lowest close since they roared higher in the debut last Friday, having been sold in the initial public offering at $5.50.
The units are now trading at more realistic levels once the hype and promotion of the IPO had died down and institutions had secured shares they missed out on in the IPO, Mr Smalley says.
Fletcher Building, the biggest company on the NZX 50, fell 0.8% to $7.85 and Telecom slid 0.2% to $2.27.