MARKET CLOSE: NZ stocks drop after three day rally
New Zealand stocks fell after a strong three day run, with weakness across leaders, including a small correction for accounting software company Xero after its recent stellar run.
The NZX50 Index of leading stocks was down 41.453 points, or 0.85 percent, to 4834.942. Within the index, 27 stocks fell, 11 rose, and 12 were unchanged. Turnover was $153.783 million on a day when several leaders, including Auckland International Airport, Metlifecare, Sky TV, and Port of Tauranga.
“The AGM announcements out today seemed OK, but possibly weren’t enough to get people excited,” said Shane Solly at Mint Asset Management.
“Sky TV, at the margin was a little more conservative,” he said, after the firm warned shareholders it faced growing competition from both domestic and international sources of broadcast content. The stock closed down 2.85 percent at $6.13, the second biggest loser after the ever volatile Oceana Gold, which was off 7.56 percent at $1.59.
Metlifecare and AIA both confirmed their earnings projections, down 1.56 percent to $3.78 and 1.45 percent to $3.39 respectively.
“Metlifecare gave a confirmation of their growth path – they’ve done a lot of work to put in the building blocks to allow them to continue to grow,” said Solly.
Port of Tauranga went against the trend, gaining 0.36 percent to $13.75, despite no uplift in earnings outlook.
Meanwhile, Xero saw a 1.86 percent correction to close at $29 a share, after spiking since Oct 17 from $17.95, just before the company announced a $180 million capital injection to fund its global ambitions.
Outside the top 50 stocks, Bathurst Resources jumped 22.8 percent to 21 cents after a late afternoon announcement it had gained long-sought resource consents to mine coking coal on the West Coast’s Denniston Plateau.
Market watchers were also digesting the outcome of the Meridian share issue, which was priced at the bottom of the predicted range, at $1.50 a share, and attracted a disappointing 62,000 retail investors, although Solly saw the result as “a good balance.”
“It’s appropriately priced given the range of risks and delivers an outcome to the government, and is quite a reasonable yield for investors.”