MARKET CLOSE NZ shares fall as investors take lead from overseas markets risk sell off

New Zealand shares fell, paced by Telecom Corp, as investors in the local market took their lead from overseas bourses which sold off on concern about a possible US-led military strike against the Syrian government as investors favoured safe haven assets such as gold.

The NZX 50 Index declined 32.309 points or 0.7 percent to 4,509.716. Within the index, 27 stocks fell, 16 rose and 7 were unchanged. Turnover was $114.9 million.

"It's difficult to avoid the negative sentiment from the overseas bourses, and our market has moved lower," said Bryon Burke, head equities dealer at Craigs Investment Partners. "Overall the market is fairly quiet, it is not an aggressive sell off by any stretch of the imagination, just a down day."

Telecom, which is the second-largest stock on the benchmark, slid 1.8 percent to $2.20 on orderflow from overseas investors, Burke said.

MightyRiverPower, the energy company that went public in May after the government sold half its stake, initially rallied but ended the day down 0.9 percent to $2.17. The company stoked optimism it will beat its prospectus forecast for shareholder returns in 2014 after finishing the 2013 year ahead of expectations.

"It is unfortunate they had their announcement on a day when there is a bit of selling around," Burke said. "Their price did rally following the announcement but now it is down, despite the announcement being pretty solid. It rallied in the morning and then as Australia opened and Asian markets opened lower, a little bit of selling came across here and along with them, other shares were sold down as well."

New Zealand company earnings had been generally positive, Burke said.

"Although they have been on the whole quite good and supported current valuations, there is certainly nothing to get people to rush in and commit more money to the market," Burke said. "There's no compelling reason to rush in and commit more money to the market while overseas are a bit negative."

Fisher & Paykel Healthcare was the fifth-best performer on benchmark after the maker of breathing masks and respirators yesterday raised its 2014 earnings forecast as new products boost sales and widen margins.

The shares rose 0.9 percent to $3.55 after managing director Mike Daniell told shareholders at the company's annual meeting in Auckland yesterday that 2014 profit is likely to be $90 million to $95 million, up from its May forecast of $85 million to $90 million and ahead of its 2013 profit of $77 million.

The latest forecast is Fisher & Paykel's fifth upgrade in a row for sales in constant currency terms, according to a report by brokerage Craigs Investment Partners, which rates the stock a 'buy' and raised its 12-month price target to $4.45 from $4.20.

Tenon, the wood mouldings company controlled by former Fletcher Challenge unit Rubicon, gained 3.7 percent to $1.40 after the company said it returned to profit on an earnings before interest, tax, depreciation and amortisation basis as the US housing market regathered momentum, and wants to more than double earnings in the coming financial year.

The company reported EBITDA of $5 million in the 12 months ended June 30, form an EBITDA-loss of $3 million a year earlier, and at the top of its guidance in May, Tenon said in a statement. The company narrowed its net loss to US$3 million from $9 million in 2012, and boosted sales 9 percent to US$364 million.

Abano Healthcare, the specialist health clinic investor facing a potential takeover tilt, slid 1.7 percent to $6.40 after the company said it wants to raise up to $18.5 million at an 8.6 percent discount in a share purchase plan and placement to institutions and eligible investors.

The Auckland-based company raised $9.25 million at $5.95 a share in an underwritten placement to selected institutions and sophisticated investors, and is seeking another $9.25 million from shareholders at the same price, it said in a statement. That's a discount to the last trading price of $6.51.

Units in the Fonterra Shareholders' Fund rose 0.2 percent to $6.88 before they were halted pending a material statement. The Ministry for Primary Industries says its own testing of Fonterra Cooperative Group's whey protein concentrate shows it contained bacteria that don't produce neurotoxins.

The ministry released results of the tests on the urging of Fonterra today after first releasing its inquiry into the contamination scare, which didn't include the results.

Trading of Fonterra's units wasn't halted on the Australian stock exchange, where they were up 1.2 percent to A$6.09.

(BusinessDesk)