MARKET CLOSE: Shares fall as prospect of new rivals weigh on retirement villages

New Zealand shares fell, led by Summerset Group Holdings, as the prospect of new rivals weighed on listed retirement village operators. Stocks with regulatory pressure, such as Air New Zealand, Chorus and energy companies fell amid political uncertainty ahead of Saturday's general election.

The NZX 50 Index fell 21.075 points, or 0.4 percent, to 5189.785. Within the index, 31 stocks fell, 12 rose and seven were unchanged. Turnover was $83.6 million, continuing light trading in the lead-up to the election.

Retirement village operators led the local market lower with two new rivals said to be mulling listings. Oceania Group is rumoured to be considering a $300 million initial public offer in a dual-listing on the NZX and ASX in the fourth quarter, and today a potential merger of 19 retirement villages, known as Hercules, was also touted as a possible listing.

Summerset led the benchmark index lower, falling 3.3 percent to $2.90. Metlifecare dropped 0.4 percent to $4.65, and Ryman Healthcare Group declined 1.5 percent to $7.68.

"There's talk now that we might see two new listings in that sector in time with Oceania being one and the new crowd, Hercules," said Grant Williamson, director at Hamilton Hindin Greene. "Investors could be given more choice and there could be some reweighting out of existing ones into the new ones. Steam has come out of those stocks after having such a great run over the past few years."

Companies prone to regulation fell ahead of the election this weekend, as a possible change in government fuelled uncertainty. While political polls largely show the incumbent National-led government returning for a third term, the campaign has been interrupted by a series of political scandals. Energy stocks are the most prone to be sold ahead of any electoral uncertainty, as the opposition Green and Labour parties have promised to introduce a state-owned single electricity buyer in a bid to push down retail prices.

Meridian Energy dropped 1.4 percent to $1.38. Contact Energy declined 1.3 percent to $5.54. Genesis Energy slipped 0.5 percent to $1.94. Chorus, the network operator charged with building the bulk of the nation's ultrafast broadband network, fell 0.3 percent to $1.745. Air NZ, the national carrier with an effective monopoly on regional domestic routes, slid 3 percent to $1.97.

"The election is not too far away now, though things seem to be changing on a daily basis, depending on what is happening," Williamson said. "I would expect, if National win you would see a bit more of an upside in the electricity stocks and other regulated companies probably, Chorus as well."

Fletcher Building, New Zealand's largest listed company, snapped four days of decline to rise 0.8 percent to $8.93. Ebos Group advanced 0.7 percent to $9.11 after three consecutive days of selling.

"Eventually profit taking ends and the bargain hunters come back in," Williamson said.

Infratil extended yesterday's gain, up 1.1 percent to $2.68, its highest close in more than six years. The infrastructure investor sold its Australian energy operations, Lumo Energy and Direct Connect Australia, for A$605 million.

Heartland New Zealand was unchanged at $1.02. Seniors Money International, which sold its 'home equity release' mortgage business to Heartland for $87 million this year, said it would sell the 9.4 percent stake it got in the lender as part payment once a 12-month lock-up ends for the shares.

Warehouse Group, the country's biggest listed retailer, fell 0.7 percent to $3.08 after it said it has appointed New Zealand Post's chief financial officer Mark Yeoman as its CFO after the sudden death of Stephen Small in May.

Xero, the cloud-based accounting software firm, was the day's best performer on the benchmark index, climbing 4.8 percent to $21.

(BusinessDesk)