MARKET CLOSE: NZ shares fall on concern gains outpace value, Chorus falls

New Zealand shares fell amid concerns the 5.6 percent advance in the NZX 50 Index last month pushed some companies ahead of their valuations. Chorus, the network company spun off from Telecom in November, fell from a record high.

The NZX 50 declined 15.93 points, or 0.5 percent, to 3493.61. Within the index, 18 stocks fell, 16 rose and 16 were unchanged. Turnover was $96 million.

The local bourse gave up early gains that had been driven by optimism about China’s manufacturing after official figures at the weekend showed that nation’s factories running at an unexpectedly fast clip. New Zealand stocks rallied through the first quarter, recording a 6.7 percent gain as the market found favour with overseas investors.

Chorus fell 2.4 percent to $3.61, having begun trading in November at $3.21.

“Chorus at $3.60-to-$3.70 is starting to look at the top of its price range,” said Mark Warminger, portfolio manager at Milford Asset Management.

Telecom gained 1 percent to $2.45 and is now the largest company on the benchmark index, taking over from Fletcher Building.

Fletcher, the nation’s biggest construction and building products group, fell 1.6 percent to $6.63. The stock has gained 9.8 percent this year.

“Fletcher’s had quite a good run as well,” Warminger said. “There are still concerns about Australian and New Zealand residential construction.”

The rebuild of Christchurch earthquake damage, in which Fletcher will play a key role, “may be longer and harder,” he said.

Sky City Entertainment Group, the hotel and casino operator fell 2.5 percent to $3.84. Contact Energy, the biggest power company on the NZX 50, fell 1.7 percent to $4.65.

Among retailers, children’s clothing chain Pumpkin Patch dropped about 1 percent to $1.02, while outdoor equipment seller Kathmandu rose 4.4 percent to $1.66 and Hallenstein Glasson Holdings, the apparel chain, rose 0.8 percent to $4.04.

Restaurant Brands, the fast-food chain, rose 1.1 percent to $1.86. Warehouse Group, which shed its 13.5 cents interim dividend tomorrow, gained 0.4 percent to $2.80.

Ebos Group, the medical equipment and pet supplies company, rose 0.1 percent to $7.25. It will be ex-dividend tomorrow for its 13.5 cent first-half payment to shareholders.

Ryman Healthcare, which invests in retirement villages, rose about 1 percent to $3.12.

Diligent Board Member Services, which sells support services for company boards, rose 3.1 percent to $3.30, a new record.

The stock “is continuing its incredibly strong run,” Warminger said. “The market is coming around to understanding that company a bit more.”

Heartland New Zealand, which operates as a building society and has ambitions to gain registration as a bank, rose 2.1 percent to 48 cents.

Air New Zealand rose 0.6 percent to 85.5 cents.