MARKET CLOSE: Shares fall; Meridian drops ahead of installment

New Zealand share fell, paced by Meridian Energy as its upcoming installment payment weighed on the market. Spark New Zealand fell to a near eight-month low.

The NZX 50 Index fell 23.904 points, or 0.4 percent, to 5793.614. Within the index, 30 stocks fell, 11 rose and nine were unchanged. Turnover was $133 million.

Meridian dropped 2.1 percent to $1.85. The partially privatised energy company listed on the bourse in October 2013, with the shares offered in installment receipts to sweeten the offer, with $1 upfront and the promise of full entitlement to dividends, and the remaining 50 cents due next month. Investors sold stocks to pay for the second installment.

"That can be a little bit systemic in that essentially for the entitlement to be taken up, it is in the realms of $650 million," said James Smalley, director at Hamilton Hindin Greene. "There is money being pulled out of the market for Meridian."

Chorus, the telecommunications infrastructure provider, dropped 2.6 percent to $2.97. Ebos Group, the animal care and healthcare company, declined 3 percent to $9.70. A2 Milk Co, the milk marketing company, fell 1.9 percent to 52 cents.

Spark fell 0.2 percent to $2.845, its lowest level since August. Formerly known as Telecom Corp, the company is chasing earnings growth in a shift away from its bread and butter land line and telecommunications service to focus on data, mobility and cloud services, including launching an online streaming service. The arrival of ASX-listed M2 Group, the voice and data services company, in the local market, after it agreed to buy New Zealand's Call Plus, the country's third biggest broadband and telecommunications services, had investors worrying about increased competition during Spark's business transformation.

"Anything that could potentially mean more competition for what was a nice, almost like duopoly between Spark and Vodafone, as well as Call Plus, could be seen as competition and erosion of margins," Smalley said. "It's hard to see because of the way the digital landscape is changing so much, it might just be that investors in that stock need to get used to the fact that you're not going to get black and white scenarios anymore."

Vital Healthcare Property Trust rose 1.8 percent to $1.705. The Auckland-based property trust has leased its Allamanda Private Hospital to the Australian stock exchange-listed hospital operator, Ramsay Health Care, for the next 21 years from November next year, with annual rent starting at A$2.4 million.

Pacific Edge, the biotech firm, led the benchmark index lower dropping 3.9 percent to 75 cents.

Outside the benchmark index, Opus International Consultants fell 3.5 percent to $1.38 after the engineering firm said the 2015 year is mixed so far, with earnings in Canada and Australia hurt by weak oil prices and a downturn in the resources sector respectively, while a buoyant economy is lifting New Zealand returns.

NZ Windfarms rose 3.5 percent to 6 cents after an Environment Court found that its Te Rere Hau windfarm in the Tararua Ranges was operating in compliance with its resource consent, after Palmerston North City Council took it to court over noise complaints.

(BusinessDesk)