MARKET CLOSE: NZX50 slips from record as F&P, Ebos decline; Skellerup jumps on upgraded earnings

New Zealand shares ended a 12-day run of gains as Fisher & Paykel Healthcare and Ebos Group fell from record closes. Skellerup Holdings advanced after projecting full-year earnings to rise as much as 19 percent.

The benchmark index edged down 2.04 points, or 0.03 percent, to 5998.98, dipping below the 6,000 level it closed above for the first time yesterday. Within the index, 17 stocks fell, 17 rose and 16 were unchanged. Turnover was $174 million.

The local benchmark slipped from yesterday's record close after being pushed higher by investor demand for equities with high dividend yields as interest rates locally and around the world look likely to stay lower for longer. Last week the European Central Bank signalled it will expand its quantitative easing programme, meaning cheaper money which fuels equity markets, while the Bank of Japan is expected to boost asset purchases when it meets this week.

"Month to date (NZX 50 Index) is up about 7.3 percent and you have to go back to July 2009, when we were discovering the world wasn't ending after all during the GFC (global financial crisis), to find a comparable month," said Matthew Goodson, managing director Salt Funds Management. "Hints from the ECB that the money tap will remain on, it feels like that had led to a torrent of yield-chasing in the offshore market."

Fisher & Paykel Healthcare, the breathing apparatus exporter, dropped 0.9 percent from a record to $7.84. Ebos Group, the animal and healthcare firm, declined 0.4 percent from a record to $13.85.

Blue chip stocks, typically held by foreign investors for their reliable dividends, were mixed. MRP rose 0.9 percent to $2.805. Spark New Zealand fell 0.2 percent to $3.97. Genesis Energy advanced 0.8 percent to $1.895. Infratil gained 0.3 percent to $3.13. Goodman Property Trust was unchanged at $1.19. Precinct Properties New Zealand advanced 0.4 percent to $1.21. Tower, the general insurer, gained 1.9 percent to $2.10.

Skellerup surged 7.6 percent to a year high of $1.56. The rubber goods firm, expects annual profit to grow as much as 19 percent as its investment in the US market begins to deliver returns and insulates it from weakness in the dairy industry. The Auckland-based company expects profit of between $24 million and $26 million in the year ending June 30, 2016, up from $21.9 million it reported in August, it said in a statement.

"They're a more diverse business than just dairy liners," Goodson said. "Farmers will be trying to economise where they can, but Skellerup has a large number of other businesses as well, so they'll be benefiting from the currency and the recovering US economy."

Outside the benchmark index, Tenon advanced 7.7 percent to $2.80, adding to yesterday's 6.1 percent gain. The company, which sells wood mouldings in the US, yesterday said it is looking at a possible sale after a strategic review to boost shareholder value attracted buyer interest. The Taupo-based company said the review, managed by Deutsche Craigs and Deutsche Bank, was running to plan and since its announcement it had received 'in-bound' interest from undisclosed third parties.

PGG Wrightson, the rural services firm controlled by China's Agria Corp, fell 2.3 percent to 42.5 cents after it said it expects annual earnings to fall as much as 12 percent from the previous year, as weaker dairy prices weigh on farm incomes. The Christchurch-based firm expects operating earnings before interest, tax, depreciation and amortisation to be between $61 million and $67 million in the year ending June 30, 2016, compared to the $69.6 million it reported for the 2015 financial year.

(BusinessDesk)