MARKET CLOSE: NZ shares fall; Diligent, ANZ, Cavalier drop; MHI, STU gain

New Zealand shares fell, led by Diligent Board Member Services while Australia & New Zealand Banking Group declined after forecasting a decline in lending margins and carpet maker Cavalier fell after saying earnings were hurt by restructuring costs.

The NZX 50 Index fell 16.385 points, or 0.4 percent, to 4513.877. Within the index, 25 stocks fell, 11 gained and 14 were unchanged. Turnover was about $120 million.

Diligent, which this month confirmed it will have to restate three years of revenue, fell 4.3 percent to $5.12 even after the Accident Compensation Corp disclosed today that it had lifted its stake this week to about 6.3 percent from 5 percent, buying 285,000 shares for $1.6 million or about $5.62.

ANZ Bank dropped 2.4 percent to $33.50, tracking its ASX-listed shares after the Australian lender said it expects its net interest margin to decline by "several more basis points" by the end of the financial year.

Tower, the general insurer, slipped 0.6 percent to $1.69 after a 6.2 magnitude quake shook Wellington. The company said it was aware of only minor damage.

"Continuing quakes aren't helpful to the insurance sector," said Grant Williamson, a director at Hamilton Hindin Greene. Tower's slide, though, has more to do with new requirements to hold more capital, he said.

Cavalier, the carpet maker, fell 6.7 percent to $1.40 after reporting annual profit of $3 million, from a year-earlier loss of $1.6 million. Sales fell 7 percent. Profit included one-time costs of $4.1 million to consolidate its Auckland tufting operations as it moves to cut costs.

"It's a pretty tough environment for them," Williamson said. The stock declined was "a bit of an overreaction. The result was disappointing but not unexpected."

Michael Hill international, the jewellery chain, was the biggest gainer on the NZX 50, rising 5.4 percent to $1.37 after reporting a 9.6 percent gain in annual profit as sales growth was underpinned by the retailer opening new stores, offsetting flat revenue on a same-store basis.

Net profit of $40 million was just ahead of First NZ Capital's estimate of $39.1 million.

The retailer "has said it is a difficult trading environment so to improve earnings as they have - just imagine how they will perform when trading picks up again," Williamson said.

Steel & Tube Holdings rose about 2 percent to $2.56 after the steel building supplies company lifted full-year profit by 19 percent even as sales fell, as it benefitted from lower prices for unfinished steel, its main input cost.

Fletcher Building rose 0.4 percent to $8.32.

Infratil rose 0.4 percent to $2.46 after announcing that it and the New Zealand Superannuation Fund will sell 60 percent of petrol station chain Z Energy for a total of $840 million ahead of a listing next week.

The Wellington and Auckland-based investment funds, who will each reap $420 million from the sale, are selling down part of their holding for $3.50 a share, the mid-point of their indicative price range of $3.25 to $3.75 a share in an initial public offering.

Telecom fell 1.1 percent to $2.25 and network company Chorus dropped 1 percent to $2.90.

(BusinessDesk)