Shares fall, pushing the NZX 50 Index to a three-month low, after the auditor-general announces an inquiry into SkyCity's bid to build a convention centre and Restaurant Brands shed its dividend.
BUSINESSDESK: New Zealand shares fell, pushing the NZX 50 Index to a three-month low, after the auditor-general announced an inquiry into SkyCity Entertainment Group’s bid to build a convention centre and Restaurant Brands shed its dividend.
The NZX 50 fell 43.86 points, or 1.3%, to 3381.73. Within the index, 27 stocks fell, 12 rose and 11 were unchanged. Turnover was $103 million.
SkyCity, the Auckland-based casino and hotel company, fell 3.4% to $3.41 after deputy auditor-general Phillippa Smith said her office will investigate how SkyCity’s proposal to build a convention centre in Auckland in exchange for more pokie machines was chosen as the best option for the government.
The arrangement was criticised as a back-room deal by opposition parties.
“That is creating a bit of uncertainty and weighing heavily on the stock,” said Michael Milne, investment adviser at Craigs Investment Partners. “The more it is brought to the fore and seen in the media the worse it will get for the shares performance.”
Restaurant Brands, the fast food franchise operator, fell 4.2% to $2.06 after going ex its 9.5 cents final dividend. Tower, which will pay an interim dividend of 5 cents to shareholders on the register as at June 15, dropped 4.8% to $1.59.
OceanaGold, which operates the Macraes gold field, rose 2.7% to $2.67 and was the biggest gainer on the NZX 50, having see-sawed with the price of gold. The spot gold price was recently quoted at $US1609.19 an ounce, up from $US1538 in mid-May.
Ebos, which distributes medical supplies and pet food, rose 0.7% to $7.60 and has gained 26% in the past six months. The stock has a dividend yield of 6.3%.
“They pay a good dividend and it’s another way to play the expose to an ageing demographic,” Mr Milne said.
Ebos has entered into a new finance facility with ANZ National Bank and Bank of New Zealand worth $135 million, smaller than the $145 million it had flagged.
Fletcher Building fell 2.4% to $6.13, leading declines among the biggest stocks on the bourse. Telecom, the biggest company on the NZX 50, fell 2.3% to $2.33 and Contact Energy declined 1.9% to $4.62.
Chorus, the network company spun off from Telecom in November, fell 2.3% to $3.03.
Trade Me, the auction website, fell 2.9% to $3.65, the second daily decline after its parent, Australia’s Fairfax Media, issued a profit warning.
Heartland New Zealand was unchanged at 52 cents after the building society named Simon Owen as chief financial officer, replacing Sean Kam. Owen had been deputy CFO.
The company also announced two new positions had been filled - head of operational risk & control and treasurer.
Carpet maker Cavalier rose 1.8% to $1.71 and Nuplex Industries gained 1.6% to $2.49.
