MARKET CLOSE NZ shares slide amid investor concern about regulation, led by Chorus
New Zealand shares fell, led by telecommunications network operator Chorus, as investors become wary that increased regulation heading in to an election year may crimp earnings.
The NZX 50 Index fell 14.505 points, or 0.3 percent, to 4,794.95. Within the index, 32 stocks fell, 11 rose and seven were unchanged. Turnover was $104 million.
Trading was lighter than normal for the end of a month because many investors had rebalanced their portfolios earlier in the week in conjunction with global index changes and as the US Thanksgiving holiday kept North American investors out of the market.
Chorus, the worst performer on the benchmark today, slumped 15 percent to $1.525, and earlier touched a new intraday low of $1.47. The National-led government's support partners said yesterday they would oppose legislative action in setting the price Chorus charges on its copper network, limiting the government's options in the face of proposed price cuts by the regulator.
"Chorus is the dominant feature in the New Zealand market," said James Snell, a director of institutional equities at First NZ Capital. "A lot of this stock has been held by dividend investors or yield investors and there is a lot less certainty around that yield."
Snell said regulation concern was spreading to other stocks.
"People are selling and it is leading to a bit of contagion through the other power companies as well,"
he said. "Offshore investors are less keen on the New Zealand story when you see the regulation threat hurt stocks in the market here."
MightyRiverPower, the state-controlled power company, fell 3.5 percent to $2.10, Meridian Energy's instalment receipts dropped 2.5 percent to 98.5 cents, while Contact Energy slipped 1.6 percent to $4.80.
Methven, the tapware maker, declined 0.7 percent to $1.47 after it confirmed a 21 percent rise in first half earnings and said it was "cautiously optimistic" about the remainder of the year. The purchase of its Chinese manufacturing operation will weigh on New Zealand earnings this year, amid improving returns from the UK and Australia, the company said.
Fletcher Building, the biggest stock on the benchmark, weakened 0.2 percent to $9.13 after government building consent figures showed the appetite for building new homes slowed in October, the first month the Reserve Bank's restrictions on low deposit mortgage lending kicked in.
Abano Healthcare Group slumped 11 percent to $6.38. A bidding group of Archer Capital, Peter Hutson and James Reeves said late yesterday it had withdrawn a proposed takeover for Abano after an independent valuer said the target's shares were worth more and the board refused to allow the group due diligence.
NZAX-listed Jasons Travel Media, the travel and accommodation guide publisher once led by Cabinet Minister Steven Joyce, last traded at 10 cents before being suspended. The company said it has told its lenders to appoint a receiver as the company's financial position deteriorates with little sign of reprieve.