MARKET CLOSE NZX: 50 falls to 2-month low, Infratil, Chorus, Meridian drop

New Zealand shares fell, pushing the NZX 50 index to a two-month low, as Infratil dropped in the wake of its buyback, Chorus suffered from the uncertainty around regulated price cuts, and Meridian Energy and MightyRiverPower declined.

The NZX 50 dropped 14.206 points, or 0.3 percent, to 4719.949, the lowest close since Oct. 10. Within the index, 18 stocks fell, 19 rose and 13 were unchanged. Turnover was $154 million.

Infratil fell 5.7 percent to $2.245 when the investment group resumed trading after being halted for an on-market buyback. Brokerage First NZ Capital bought 24.8 million shares at $2.38 apiece in a buyback that been slated for October before being delayed by Infratil's purchase of a stake in Metlifecare.

"Perhaps the buying had held up on the back of the buyback in anticipation of a bit of a premium - other electricity players have been slaughtered of late," said Greg Easton, an adviser at Craigs Investment Partners. "Now the transaction has happened, the stock has been released to go down with the others."

Infratil owns a controlling stake in TrustPower, which was unchanged at $6.50 today. MightyRiverPower fell 0.5 percent to $1.98 and Meridian Energy fell 3.2 percent to 89.5 cents.

With the threat of a regulated market if the opposition Labour Party and Greens win power next year, "Australian institutions have been dumping them all," Easton said.

Fletcher Building, the biggest company on the NZX 50, fell 1.7 percent to $9.08. The stock has fallen in the wake of Capital Group's disclosure this week that is ceased to be a substantial holder, having sold 21 million shares at $9.

Chorus fell 3.8 percent to $1.38, a new low, after Communications Minister Amy Adams urged the company to engage with Crown Fibre Holdings to protect the government's broadband investments after an independent report indicated a sizeable funding shortfall to build its share of the ultrafast broadband network as a result of regulated cuts to what can charge on its copper network. Adams said negotiations could take a few months to be finished.

"It raises more questions than answers," Easton said. "We were hoping to get those answers, but they are going to be a few months away."

Delegat's Group was unchanged at $3.70 after managing director Jim Delegat told shareholders annual operating profit will rise by about 10 percent to $29 million in the 2014 financial year, while warning the bottom line might be hit by a strong currency.

SkyCity Entertainment Group rose 1.9 percent to $5.91 after a Deutsche Bank/Craigs Investment Partners report said the hotel and casino operator will get an earnings boost from its Adelaide redevelopment in 2017.

Post Plus Group gained 5.6 percent to 9.5 cents after the retailer agreed to sell its school uniform business, SchoolTex, for $9 million. The retailer has been struggling to recover from a botched outsourcing of its distribution centre.

New Zealand Oil & Gas was unchanged at 82 cents after acquiring interests in three new permits in the government's 2013 block offer. The oil and gas explorer has a 30 percent interest in each of the offshore Taranaki, Canterbury and Great South Basin permits.

(BusinessDesk)