MARKET CLOSE: NZ shares drop, led by Ebos, Tower and A2 Milk

New Zealand shares fell in light trading, with Ebos Group, Tower and A2 Milk leading the index lower.

The S&P/NZX 50 Index fell 31.88 points, or 0.4%, to 7264.86. Within the index, 28 stocks rose, 17 fell and five were unchanged. Turnover was $106.7 million.

"It's a very quiet day after what was a busy week last week – with retailers reporting, Fonterra, and the Reserve Bank's interest rate decision, things have gone from one extreme to another and it's exceptionally quiet," Craigs Investment Partners investment adviser Peter McIntyre said.

"All Asia's trading lower today, and we've picked up that theme as well, but on very light volume."

Ebos was the worst performer on the index, down 2.4% to $18.55, while Tower dropped 2% to 98c.

Meridian Energy fell 2.1% to $2.79. It's due to pay an 8.4c final dividend and a 2.44c special dividend on Thursday.

"It's still carrying a reasonable dividend, there's no strong rationale as to why they're significantly weaker – they’re the largest gentailer in the market, maybe there's been some rotation or lightening of exposure there," Mr McIntyre said. "It's generally a sector where most brokers are overweight."

A2 Milk declined 1.6% to $1.85. It reached a record $2.30 a month ago but has fallen back since, having plunged after reporting its annual earnings despite meeting its guidance with a return to full-year profit and a 127% jump in revenue that was driven by infant formula sales in Australia and China.

"It's below the $2 mark, which is sometimes a trigger for it to bounce back up again," Mr McIntyre said.

"GlobalDairyTrade auctions have been getting stronger, so the cost of their raw material will be increasing as well and I think the market's factoring a little bit of that into the share price."

Air New Zealand continued to fall, down 1.1% to $1.80, and has dropped 32% this year.

"It continues its slide on pretty reasonable volumes. I think it's a sector move out of airlines – the competition factor, some of the last market updates Air New Zealand's given the market have been weaker on the load and the yield basis. There may be a lightening from institutional investors in that stock," Mr McIntyre said.

Vector was the best performer, up 3.4% to $3.35, while Z Energy rose 1.6% to $8.30. Mr McIntyre said Z had given the market a couple of updates recently, including one about procurement contracts on Friday, and they had been well-received.

Port of Tauranga rose 1.5% to $19.80, Comvita gained 1.3% to $11.50, and New Zealand Refining Co advanced 1.3% to $2.39.

Outside the main index, Energy Mad fell 7.4% to 5c. The energy efficient light-bulb maker has warned lower prices for carbon dioxide offsetting certificates in Australia mean its sales volumes are likely to decline.

Augusta Capital dropped 1.4% to $1.055. The Auckland-based fund manager and property investor paid 73c per share, 14% above the market price, to take a 9.3% stake in listed property investor NPT.

Pyne Gould Corp was unchanged at 20.5c. Guernsey-based Pyne Gould and Bath Street Capital won't go to court over what's owed in relation to Pyne Gould's sale of Perpetual Trust. Both sides had been seeking at least $22 million in damages.

(BusinessDesk)

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