BUSINESSDESK: New Zealand shares fell, led by Auckland-based pipeline company Vector, after the Commerce Commission recommended price controls on its gas network. Goodman Fielder led gaining stocks.
The NZX 50 Index fell 2.81 points, or 0.1%, to 4001.44, still near the highest in more than four years. Within the index, 24 stocks fell, 16 rose and 10 were unchanged. Turnover was $134 million.
Vector dropped 5.2% to $2.75. The network owner would have to accept a 25% cut to its transmission charges for gas pipelines under default price-quality paths proposed by the Commerce Commission.
That was the biggest price change recommended for any of the affected companies and Vector says the process is "flawed".
"People are trying to work out what it means in terms of dollars and cents," says Chris Timms, an adviser at Craigs Investment Partners. "If you own Vector you've probably have got used to the idea."
Nuplex Industries, the specialty chemicals company, fell 2.5% to $3.12 and Skellerup Holdings dropped 1.7% to $1.71.
The NZX 50's decline was less than some of the biggest drops across Asia, which broadly followed Wall Street lower.
Mr Timms says the local market is being underpinned by inflows from KiwiSaver funds, amounting to some $4.5 million of new money a week, and low interest rates which are pushing some investors towards dividend yields on stocks.
"At the moment we're in a bit of a sweet spot," he said. "A lot of companies have paid down debt and have good cash flows."
Goodman Fielder rose 4.4% to 72 cents and insurer Tower gained 2.7% to $1.91.
Cavalier fell 1% to $1.97 after the carpet company named Paul Alston as chief financial officer replacing Victor Tan, who is retiring after 28 years with the firm.
New Image Group, which makes colostrum-based health tonics, soared 56% to 25 cents after saying it expects annual sales will beat $100 million after its Malaysian business underpinned a strong first quarter result, and helped push the shares to a 12-month high.
The Auckland-based company turned to a pre-tax profit of $3 million in three months ended September 30, compared to a loss of $1 million a year earlier, it says in a statement.
A2 Corp, which markets milk products with a protein variant claimed to have health benefits, climbed 9.8% to 67 cents after sayings a distribution deal it has done in China should generate $US50 million of revenue in four years' time.
Fletcher Building fell 0.4% to $7.35. Telecom rose 0.2% to $2.48.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Trade Me gets fewer snooping requests from govt agencies – but others report mixed results
- NBR's Jenny Ruth outlines the latest development in legal battles in the human resources world
- ‘I can’t understand what their issue is’ – TV3’s Mike McRoberts on Fairfax, NZME’s Rio Olympics boycott
- National's 10% poll jump isn't believable - but the party's support does seem to be holding up
- Nevil Gibson's Editor's Insight names those most affected by the phase-out of ETS subsidies