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Market close: GPG falls on pension jitters, Trade Me declines, MRP hits post-IPO low


Turnover of $599 million was inflated by 60.3 million units of Fonterra Shareholders' Fund | Mighty River fals to $2.36, the lowest level since its IPO at $2.50.

Wed, 11 Jul 2018

New Zealand shares fell, pushing the NZX 50 Index down to a month low, as investors fretted about the UK's regulator focus on Guinness Peat Group's pension liabilities and a brokerage put a sell order on Trade Me after its 23 percent surge this year.

The NZX 50 fell 48 points, or 1.1 percent, to 4478.20, the lowest close since April 22. Within the index, 36 stocks fell, nine rose and five were unchanged.

Turnover of $599 million was inflated by 60.3 million units of Fonterra Shareholders' Fund after 20 percent of Fonterra's farmers sold some of the economic rights to their shares.

GPG fell 5.2 percent to 46 cents. The company is winding down its investment portfolio with the aim of returning funds to shareholders and re-emerging as Coats, the threadmaker that constitutes its biggest remaining investment.

Last week it said the UK Pensions Regulator is mulling whether it should provide more support to its liability for the Coats pension schemes.

"It is just the fact that the UK regulator is doing what will be quite a slow-burning investigation," says Matthew Goodson, managing director at Salt Funds Management. "But the chances of anything happening are low."

Trade Me, the auction website, fell 3.6 percent to $4.85. A major brokerage put a sell recommendation on the stock last week. The median price target for the stock is $4.60, based on a Reuters poll.

SkyCity Entertainment Group, the casino and hotel chain that inked a deal with the government to build a convention centre in exchange for more gambling concessions, fell about 4 percent to $4.34.

Fletcher Building, the biggest company on the index by market value, fell 1.2 percent to $8.28 and Telecom dropped 0.4 percent to $2.29, weighing on the index as shares in both New Zealand and Australia dipped.

Mr Goodson says the theme of offshore investors holding high-yielding stocks and benefitting from rising currencies down under has been unwound as both the kiwi and the Australian dollar weakened.

"So there's been a rush to the exit door by some of those more leveraged players." 

Fonterra Shareholders' Fund units fell 3.1 percent to $7.60. Farmers shareholders offered to sell about 75 million economic rights to their so-called wet shares under the company's supply offer, resulting in them being scaled back.

Fonterra is buying units that arise as a result of supply offer and will then redeem them for shares.

Air New Zealand declined 3 percent to $1.46 and New Zealand Oil & Gas fell 2.9 percent to 83 cents.

Mighty River Power declined 4.5 percent to $2.36, the lowest level since they were sold in an initial public offering at $2.50.

Acurity Health Group fell 2 percent to $4.95 after the private hospital operator formerly known as Wakefield Health reported a smaller decline in annual earnings than forecast, while warning subdued demand for private sector health was making it difficult to keep a lid on costs.

Allied Farmers tumbled 20 percent to 2 cents after the Inland Revenue Department sought to wind up its rural unit over unpaid taxes.

(BusinessDesk)

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Market close: GPG falls on pension jitters, Trade Me declines, MRP hits post-IPO low
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