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MARKET CLOSE NZ stocks fall; MightyRiverPower, Contact, Meridian drop

 New Zealand shares fell, paced by power companies MightyRiverPower, Contact Energy and Meridian Energy against a backdrop of an opposition party threat to control prices, broadly stagnant demand and a new Electricity Authority probe.

The NZX 50 Index fell 8.476 points, or 0.2 percent, to 4783.853. Within the index, 27 stocks fell, 17 rose and six were unchanged. Turnover was $137 million.

MightyRiverPower fell 1.9 percent to $2.06, Contact Energy dropped 1.3 percent to $4.75 and Meridian declined 2.1 percent to 95 cents. The Electricity Authority said today it would mount an investigation into the practices of big power companies to retain customers. At the same time, Labour and the Greens have vowed to impose a central buying agency in the power market should they win at next year's elections.

"There's going to be that background of uncertainty," said Matt Goodson, managing director at Salt Funds Management. Added to that, electricity demand is "stagnant" in the face of energy efficiency measures and the hollowing out of power hungry industries such as pulp and paper and aluminium smelting.

TrustPower was unchanged at $6.50.

Air New Zealand fell 0.9 percent to $1.60, again below the $1.65 rate at which the government managed to sell 20 percent of the airline.

Chorus rose 0.7 percent to $1.45, recovering from the previous day's close when it reached the lowest level since being spun off from Telecom in late 2011. Yesterday Chorus sought a final pricing review from the Commerce Commission and applied to the High Court for a review of the regulator's interpretation of law under which it is planning to force the company to slash prices in December 2014.

"It is an incredibly frustrating situation," Goodson said. "It is a bad look for the country and bad for the market."

He said the Commerce Commission has "clearly botched its retail price comparison" by using Sweden and Denmark as a comparison, while the government "had put a law in place while not really seeming to understand the implications."

Synlait Milk fell 1 percent to $3.79 after the dairy processor affirmed it was on track to meet IPO forecasts for the 2014 financial year at today's annual meeting.

Units in the Fonterra Shareholders' Fund rose 0.2 percent to $6.51 after figures showed prices for locally produced raw materials snapped four months of gains in November. Whole milk powder prices fell 3 percent, though a weaker currency helped offset the decline.

Auckland International Airport rose 0.6 percent to $3.59 after rating agency Standard & Poor's affirmed the hub's A-/A-2 credit rating, while revising down its outlook to 'stable' from 'positive', on the airport's planned capital return.

Fletcher Building, the biggest company on the bourse, gained 0.2 percent to $9.25 after saying it closed a Christchurch plasterboard plant for two months and spent $4 million to replace a roof contaminated by asbestos. The plant's new roof is expected to be completed this weekend.

Pumpkin Patch fell 1.2 percent to 84 cents after a disclosure notice showed director Maurice Prendergast sold 1 million shares on market at about 85 cents apiece on Nov. 28.

Companies with large exposures to Australia were under pressure after the New Zealand dollar topped 90 Australian cents for the first time in five years. Outdoor equipment chain Kathmandu fell 1.4 percent to $3.50, jewellery chain Michael Hill International dropped 2.1 percent to $1.40, and alternative milk marketer A2 Corp declined 1.3 percent to 76 cents.

Moa Group gained 7.5 percent to 72 cents after it yesterday announced it had signed distribution deals into Australia with Australian Liquor Marketers and Independent Liquor.

(BusinessDesk)