MARKET CLOSE: Shares fall; ANZ, Spark drop, FSF rebounds from record low

New Zealand shares fell, paced by Australia and New Zealand Banking Group and Spark New Zealand, as weakness in the Australian stock market weighed on dual-listed companies. Fonterra Shareholders' Fund rebounded from a record low.

The NZX 50 Index fell 20.275 points, or 0.3 percent, to 5861.482. Within the index, 25 stocks fell, 15 rose, and 10 were unchanged. Turnover was $128 million.

Across the Tasman, Australia's S&P/ASX 200 Index fell 1.2 percent in afternoon trading, as weak Chinese data from earlier in the week continued to weigh on the Australian market. Dual-listed stocks fell. ANZ declined 2.1 percent to $36.03. Spark, formerly Telecom Corp, dropped 1.4 percent to $2.89. Fletcher Building, the construction building supplies and construction firm, slipped 1.7 percent to $8.35.

"It's a pretty mixed market," said Bryon Burke, head of equities at Craigs Investment Partners. "Following that China report earlier in the week the Aussie market has been under a bit of pressure, as the demand for commodities is a bit softer given the Chinese economy and the flows through to us as well."

Units of Fonterra Shareholders' Fund, which give holders access to Fonterra Cooperative Group's dividend stream, rose 2 percent to $5.20 rebounding from yesterday's record low close of $5.10. Earlier this week, dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. Last month, the world's largest dairy exporter posted a 16 percent drop in first-half profit, which it said reflected tough conditions in dairy, while also trimming its guidance for dividends to a range of between 20 cents and 30 cents, from a previous 25 cents to 35 cents.

"Unit holders would love to see consistency in earnings and therefore dividends - that's really what has been missing so far since they listed," Burke said. "The market expected a higher dividend, so there's certainly been unit pressure from investors influencing the price, as opposed to farmer compulsory trading."

Tower led the benchmark index lower down 2.6 percent to $2.27, paring yesterday's 2.6 percent gain after the general insurer said its capital holdings are well in excess of the Reserve Bank's minimum solvency requirements, giving it room to buy back as much as $34 million of its stock.

Infratil rose 0.2 percent to $3.185. The Commerce Commission has said that the revised land fees of Wellington International Airport, which is two-thirds are owned by the infrastructure investors, are "just within" the regulator's acceptable range of returns.

Air New Zealand, the national carrier, fell 1.2 percent to $2.7. The airline's new direct service to Houston, Texas, could pave the way for a potential partnership with American-based United Airlines that would help fend off competitors on routes between New Zealand and North America, market analysts say.

Outside the benchmark index, Hellaby Holdings fell 2.5 percent to $3.19. John Williamson, managing director of Hellaby, will step down at the diversified investors' annual meeting, after nearly eight years with the company.

Livestock Improvement Corp, which are only available for trading by its farmer shareholders, were unchanged at $6.10. The farmer cooperative that sells bull semen and manages a dairy genetics database has entered a research and development partnership with Dutch agricultural company Lely Group.

Moa Group, the unprofitable craft beer company, was unchanged at 40 cents. Malcolm Bloor has overtaken from Ken Bugden as chief financial officer.

(BusinessDesk)