Shares slip as Arrium exits Steel & Tube, Asian markets decline

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BUSINESSDESK: New Zealand shares fell for a second day as investors wound down stakes in other companies to buy a flood of shares in steel products maker Steel & Tube after its Australian parent exited the firm, and as stocks across Asia fell amid fears of China's slowing economy.

The NZX 50 index fell 19.85 points, or 0.5%, to 3888.14. Within the index 27 stocks fell, 11 gained and 12 were unchanged. Turnover was $95.2 million.

The local market followed stocks across Asia down as investor nerves were rattled by continued fears about the strength of China's economy. Japan's Nikkei 225 index fell 1.8% in afternoon trading, Hong Kong's Hang Seng Index declined 0.2% and Australia's S&P/ASX 200 index decreased 0.3%.

The benchmark index fell as some investors sold out of other companies to take up $91.2 million of shares in Steel & Tube, after ASX-listed Arrium exited its 50.3% at a 15% discount to yesterday's closing price.

The shares fell 8.3% to $2.22, a 7.7% premium to Arrium's sale price. Accident Compensation Corp bought 6 million shares for $12.4 million, taking a 7.2% stake in Steel & Tube.

"What may have happened is funds liquidated holdings in other areas to take up a stake in Steel & Tube," says James Smalley, client adviser at Hamilton Hindin Greene.

The NZX 50 index was led lower by Skellerup, which fell 3.4% to $1.69 after shedding rights to its dividend, and fast food operator Restaurant Brands, which declined 2.1% to $2.33.

Fletcher Building, the biggest listed company, fell 1.9% to $7.16, and Telecom, the second-biggest, declined 1.5% to $2.33.

Power company Contact Energy was the biggest gainer on the day, up 1.7% to $5.36 after the Electricity Authority determined a new pricing regime for the national grid reflecting its benefit to generators and consumers. TrustPower fell 1.9% to $8.18.

Food ingredients-maker Goodman Fielder gained 1.5% to 67 cents and children's clothing chain Pumpkin Patch advanced 0.8% to $1.21.

Shares in NZX fell 0.9% to $1.14 after the stock exchange operator announced Fronde Systems Group's Mandy Simpson will join it as head of operations next month, and as the existing head of market services Simon Smith announced his resignation.

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NZ Market Snapshot


Sym Price Change
USD 0.7532 0.0007 0.09%
AUD 0.9607 -0.0002 -0.02%
EUR 0.6755 0.0027 0.40%
GBP 0.4981 0.0013 0.26%
HKD 5.8389 0.0064 0.11%
JPY 90.5460 0.1570 0.17%


Commodity Price Change Time
Gold Index 1174.5 -6.010 2015-05-01T00:
Oil Brent 67.8 1.020 2015-05-01T00:
Oil Nymex 60.4 -0.430 2015-05-01T00:
Silver Index 16.1 -0.018 2015-05-01T00:


Symbol Open High Last %
NZX 50 5797.4 5797.4 5797.4 -0.52%
NASDAQ 5018.4 5043.6 5005.4 0.56%
DAX 11506.8 11656.9 11454.4 1.44%
DJI 18026.0 18133.8 18024.1 0.46%
FTSE 6960.6 6995.4 6960.6 0.36%
HKSE 28231.3 28343.7 28133.0 -0.03%
NI225 19510.8 19549.4 19520.0 0.06%