MARKET CLOSE: Shares drop from record, Meridian falls on dividend

New Zealand shares fell, as the NZX 50 Index dropped from a record in a global sell off as investors took the opportunity to crystallise the bourse's gains. Meridian Energy snapped six days of gains as it shed rights to its dividend. Spark New Zealand and Fletcher Building paced the decline.

The NZX 50 Index fell 24.373 points, or 0.5 percent, to 5253.488. Within the index, 29 stocks fell, 11 rose and 10 were unchanged. Turnover was $98.5 million.

Markets across Asia declined after a drop in Apple Inc's share price following ongoing issues with its latest iPhone offering weighed on Wall Street. Japan's Nikkei 225 Index declined 1 percent in afternoon trading. Australia's S&P/ASX 200 Index fell 1.2 percent and Hong Kong's Hang Seng Index slipped 0.5 percent.

New Zealand's benchmark index has advanced 1.3 percent this week, after a convincing win for the incumbent National party returned Prime Minister John Key and his government to a third term. Energy stocks have particularly benefited from the electoral certainty as it shut down the threat of regulation, which had been a cornerstone policy for opposition parties in trying to drag down power prices for consumers.

"Those negative offshore leads have had an impact on the market, but it has been pretty muted," said James Smalley, director at Hamilton Hindin Greene. "We've held up pretty well - obviously the election result, which the market took pretty well, has held us up today. The offshore weakness is giving people the opportunity to take some profit out of the market."

Meridian Energy fell 4.6 percent, or 7 cents, to $1.465 and has advanced 14 percent over the past month. The partially-privatised energy generator and retailer shed rights to its 8.82 cents per share final dividend, which includes a 2 cent special dividend, payable on Oct. 15.

TrustPower declined 0.7 percent to $7.35. Contact Energy gained 0.5 percent to $5.94. Genesis Energy was unchanged at $2.03, as was MightyRiverPower at $2.59.

Local tech stocks got caught in Apple's decline, Smalley said. Diligent Board Member Services, the governance app developer, dropped 3.8 percent to $4.58. Xero, the cloud-based accounting software company, declined 2.1 percent to $20.65.

Spark, formerly Telecom Corp, fell 1.3 percent to $2.95. Fletcher, New Zealand's largest listed company, slipped 0.5 percent to $8.75.

Kathmandu Holdings, the outdoor goods retailer, declined 1.2 percent to $3.23. Trade Me Group, the online auction site, fell 1.4 percent to $3.46. Warehouse Group, New Zealand's largest listed retailer, dropped 1.3 percent to $3.06.

Heartland New Zealand was the best performer on the day, up 2 percent to $1.03. Director Gary Leech will retire from the lender's board next month, after three years on the board including when the bank formed after the merger of Canterbury and Southern Cross building societies and Marac Finance.

Outside the NZX 50, Pumpkin Patch [NZX: PPL], the second-worst performing stock on the NZX All Index the past 12 months, was unchanged at 43 cents. The childrenswear retailer turned to an annual loss of $10.2 million in the 12 months ended July 31, from a profit of $5.1 million the year earlier, and signalled earnings are unlikely to improve for another year. The company, which fell out of the benchmark index last year, suffered a series of setbacks last year including disruptions to its supply chain as increased rivalry drove down prices, has embarked on a two-year "transformation process" in an attempt to boost earnings. The company failed to pay a dividend for a third year as it focuses on reducing debt, and isn't expected to return a dividend to shareholders until the 2016 financial year, according to analyst estimates compiled by Reuters.

On the New Zealand Alternative Index, Burger Fuel Worldwide advanced 1.9 percent to $2.75. The burger chain plans to bring its franchise stores in-house which it expects will deliver greater profitability, and has bought the Henderson, Auckland store for an undisclosed sum.

(BusinessDesk)