Market close: Shares fall as dividends shed, Cavalier gains

BUSINESSDESK: New Zealand shares fell as some of the country's biggest companies, including Telecom and Port of Tauranga shed their dividend, diminishing the appeal for investors.

The NZX 50 Index fell 6.57 points, or 0.17%, to 3797.89. Within the index, 19 shares fell, 20 fell and 11 were unchanged. Turnover was a larger-than-normal $139 million.

The decline was led by Telecom, the largest company on the NZX50, down 7% to $2.31 after it shed its dividend of 11 cents per share. Chorus, the telecommunications network which demerged from Telecom last year, was down 4.8% to $3.37. It is paying a dividend of 14.6 cents per share.

Port of Tauranga, the nation's busiest port, decreased 2.1% to $12.70, shedding its final dividend of 27 cents apiece.

"The big movers on the day are all about the ex-dividend," Shane Solly, portfolio manager at Mint Asset Management. "A lot of people are thinking about what they will do with their dividends and whether or not they'll reinvestment them into the market."

Fletcher Building, Mainfreight and Contact were among the gainers as stocks across Asian Pacific rallied after the Bank of Japan joined the Federal Reserve in plans to stoke economic growth. The BOJ will add 10 trillion yen (US$127 billion) to its 45 trillion-yen fund that buys assets including government debt.

The gainers were led by Cavalier, New Zealand's only listed carpet marker, up 3.6% to $2.00. Australian wool merchant and processor Lempriere Holdings has locked up 75% of New Zealand Wool Services International, scuttling Cavalier's to build a national wool scouring monopoly.

Wool Services was last at 37 cents.

Kathmandu, the outdoor equipment and clothing retailer, fell 3.4% to $1.70 ahead of its full year result tomorrow. Fletcher Building, New Zealand's largest construction company, rose 1.7% to an 11 month high of $7.00.

"People are taking a positive position on the improving activity here in New Zealand," Mr Solly says.

Contact Energy, the country's biggest listed electricity generator, rose 1.8% to a nine-month high of $5.18.

Heartland New Zealand, the lender formed from the merger of Pyne Gould's Marac Finance with the Canterbury and Southern Cross building societies, rose 3.3% to 63 cents. That is the highest it has traded since August 2011. The stock has gained about 29% this year.

Mainfreight, the biggest road transport company listed on the NZX 50 Index, climbed 1.3% to a 13-month high of $10.63. The stock has risen about 6%this year.