MARKET CLOSE: Shares fall; AIA, Spark, Fletcher decline

New Zealand shares fell, led by Auckland International Airport, Fletcher Building and Spark NZ amid selling by offshore investors concerned the falling kiwi dollar is eroding the value of their holdings.

The NZX 50 Index fell 34.671 points, or 0.6%, to 5779.263. Within the index, 21 stocks fell, 17 rose and 12 were unchanged. Turnover was $103 million.

The benchmark index has gained 4.4% since the start of the year, climbing to record levels, as New Zealand's relatively high-yielding equities and an appreciating kiwi dollar attracted offshore investors. The local currency has since fallen 10% percent, or 8USc, to trade at 69.60USc, causing some offshore investors to sell local stocks to avoid further depreciation.

Auckland International Airport, the nation's biggest listed company by value, fell 1.2% to $4.99. Fletcher, the second-largest, dropped 2.4% to $8.17. Spark fell 1.8% to $2.735.

"We are a market that is trading on elevated multiples and people have talked about that until they're black and blue in the face," Rickey Ward, New Zealand equity manager at JB Were said. "So [international investors] have traded on really high multiples and they've got the benefit out of that. It's natural to see them exit," given the weak kiwi.

Meridian Energy, the state-controlled utility company, declined 1.8% to $2.15. Yesterday, the Electricity Authority flagged South Islanders and many large industrial electricity users, including the Tiwai Point aluminium smelter, which Meridian provides power to, might get cheaper power at the expense of Auckland, Northland and West Coast consumers, if its proposals are adopted.

Meridian "should be doing pretty well with a reliable income stream and the draft report out yesterday from the Electricity Authority, which portrays and promotes a positive outcome for Meridian, and yet the share price is weaker today," Mr Ward said. Sellers have "come back into the market on the currency argument."

Rival energy generator MightyRiverPower declined 1.8% to $2.70. Contact Energy fell 1.5% to $5.18. Genesis Energy was unchanged at $1.86.

Units in Fonterra Shareholders' Fund fell 0.2% to $4.60. Overnight global milk prices declined, although not by as much as some in the market had feared, Mr Ward said. The fund's units give holders access to the dividend stream of Fonterra Cooperative Group shares.

Orion Health Group, the health management software developer, was the best performer on the NZX 50, climbing 5.1% to $4.10.

Outside the benchmark index, Airwork Holdings fell 0.7% to $3.07. The aviation service firm extended a contract with Toll Group to service and maintain the logistic company's Australian express air-freight business.

(BusinessDesk)