MARKET CLOSE NZX 50 Index falls from a record as investors take profits

New Zealand shares declined for the first time in two weeks as investors took advantage of gains to sell their shares at a profit.

The NZX 50 Index fell from a record, dropping 22.658 points, or 0.5 percent, to 4730.377. Within the index, 23 stocks declined, 20 rose and 7 were unchanged. Turnover was about $164 million.

The local bourse took its lead from overseas stock markets in the US and Australia which retreated following rallies after the US Federal Reserve unexpectedly decided to maintain its monetary stimulus programme. Those giving up gains included the S&P 500, the Dow Jones Industrial Average and the S&P/ASX 500.

"It is just a bit of profit taking following some pretty solid rises in recent days," said Grant Williamson, a director at Hamilton Hindin Greene. "The offshore markets were a little bit weaker and that has probably caused a few of the local investors to take some profits. I don't think the selling will last too much into next week."

Fletcher Building, which has gained 20 percent the past month, paced the declines, dropping 2.5 percent to $9.58.

"It follows what has been a stellar few weeks for Fletcher Building's share price," Williamson said. "Things can't go up in a straight line and today is a day when we are seeing a bit of profit taking."

Team New Zealand's loss in America's Cup racing today to Oracle may have dented investor confidence, Williamson said.

Government plans for the partial listing of state-owned Meridian Energy is the day's biggest stock news and is likely to occupy investors and analysts over the weekend, Williamson said.

Meridian shares are likely to list at between $1.50 and $1.80 apiece, but the highest price a retail investor will pay if they buy shares in the float will be $1.60, according to the offer documents.

The low end of that range gives Meridian a market capitalisation of $3.8 billion and the top end puts it at $4.6 billion, meaning the government can expect to up to $2.3 billion from the sale of a minority 49 percent of the shares in its largest electricity company.

"Fund managers and advisers will be looking at the fundamentals on Meridian and if they view them as more attractive than something else that is already listed, they could be recommending selling some existing shares in order to apply for shares in the IPO," Williamson said. "That can create a little bit of weakness on a market as investors look to raise some capital for the new listing."

Abano Healthcare Group fell 1.5 percent to $6.60. A potential takeover bid led by private equity firm Archer Capital and involving former director Peter Hutson significantly undervalues the targeted dental business and completely ignores the other units, says managing director Alan Clarke.

Archer Capital, with Hutson, who owns about 15 percent of the specialist healthcare investor, have made an indicative offer of $6.97 a share, valuing Abano at $131.4 million. As part of the deal, an Archer-owned Abano would sell its audiology unit to Hutson for a nominal sum.

MightyRiverPower gained 2.3 percent to $2.25 after director James Miller and chief financial officer William Meek went trawling for cheap shares when the government-controlled power company's share price touched new lows this month.

Miller, a former energy sector analyst, bought 9,000 MRP shares on market on Sept. 11 in two transactions at $2.20 apiece, and topped that up on three more occasions this week, buying a further 15,000 shares at $2.17, according to notices filed with the stock exchange. CFO Meek also bought 2,700 shares on-market at $2.17 on Sept. 13.

(BusinessDesk)