MARKET CLOSE: NZ shares fall from record, led by Warehouse, Kathmandu

New Zealand shares fell from a record led by Warehouse Group, as the retailer extended its decline after poor Christmas sales. Kathmandu Holdings paced the fall while dividend-paying stocks, including Meridian Energy, Precinct Properties New Zealand and MightyRiverPower advanced as investors chased yield.

The NZX 50 Index fell 6.573 points, or 0.1 percent, to 5642.052. Within the index, 28 stocks fell, 15 rose, and seven were unchanged. Turnover was $115 million.

Retailers fell after flagging a slow start to the peak Christmas season and shrinking margins in the competitive environment. Warehouse, New Zealand's largest listed retailer, dropped 2.5 percent to $2.70, after last weak confirming sales were slower than last year due to unseasonal weather. Kathmandu, the outdoor goods retailer, declined 1.6 percent to $1.90.

"It's been a knock-on effect with the Warehouse coming out with its trading update the other day while Kathmandu is continuing its slide from when it updated the market before Christmas," said Robert Garden, investment adviser with Craigs Investment Partners. "Money is being spent, it's just not where it traditionally used to be spent and the retailers, particularly the Warehouse and Kathmandu, are struggling on that front."

Energy companies and property stocks, favoured for their steady dividend income, rose as investors chased yield in the face of ongoing low interest rates. Precinct Properties New Zealand was the best performer on the day, climbing 2 percent to $1.265. Meridian Energy advanced 1.6 percent to $1.92. Contact Energy gained 1.1 percent to $6.57. MightyRiverPower rose 0.9 percent to $3.22. Vital Healthcare Property Trust increased 0.6 percent to $1.61. DNZ Property Funds was up 0.5 percent to $1.95. Genesis Energy increased 0.5 percent to $2.13. Argosy Property gained 0.4 percent to $1.135.

"Yield stocks are still holding up well," Garden said. "That's going to be a bit of a theme over the first part of the year as deflationary pressures come through from a reduced oil price and petrol prices at the pump - we're not going to see the Reserve Bank do anything with the interest rates."

Infratil rose 0.7 percent to $2.99. Utilico Investments, a UK investor managed by Infratil director Duncan Saville's ICM, has reduced its stake in the Wellington-based infrastructure investor to 6.9 percent from 8.8 percent selling $30.7 million worth of shares on market yesterday.

Outside the benchmark index, Moa Group dropped 2.4 percent to 40 cents. Grant Baker is stepping down as chairman of the unprofitable boutique brewery and will be replaced by independent director Ashley Waugh as it reshuffles the board to chase Australian and New Zealand sales.

IkeGPS, the remote measuring device developer, rose 5.3 percent to 79 cents after it signed a $500,000 contract with a US utility company, and is pursuing similar larger deals with an update expected before the end of next month.

(BusinessDesk)