MARKET CLOSE: Shares fall; Meridian, Genesis decline after quarterly gains

New Zealand shares fell on the last day of quarter as investors locked in profits from a 2.2 percent gain over the period. Meridian Energy and Genesis Energy paced the day's decline.

The NZX 50 Index fell 4.47 points, 0.1 percent, to 5255.037. Within the index, 22 stocks fell, 17 rose and 11 were unchanged. Turnover was $173 million.

The benchmark index advanced 2.2 percent in the three-month period with energy stocks propelling its advance. Electoral uncertainty had seen energy generator and retailers sold off as investors feared a change in government would lead to further regulation on the sector, as a main opposition party policy was to lower the price of retail electricity. Energy stocks then rallied as support grew for the incumbent National-led administration in the lead up to the Sept. 20 general election, and the subsequent win giving Prime Minister John Key and his National government a third term.

Meridian Energy dropped 1.7 percent to $1.43, after advancing 18 percent this quarter. MightyRiverPower declined 0.6 percent to $2.565, after a 15 percent quarterly gain. Genesis Energy fell 0.5 percent to $2.02, having gained 12 percent over the past three months.

"It has been a very volatile quarter," said Mark Lister, head of private wealth research at Craigs Investment Partners. The benchmark index "has had a good run, and it probably has got a bit ahead of itself in the short term."

Despite today's weakness, the gains in energy stocks "are genuine because the outlook for them has changed - it's not just a short-term boost, it's actually a shift in the earnings backdrop for those companies," Lister said. "The sector will hold its own and probably push higher."

Contact Energy climbed 1.1 percent to $5.98, having climbed 13 percent in the quarter. TrustPower edged 0.1 percent higher to $7.31, after gaining 2.2 percent in the quarter.

Markets across Asia Pacific fell as pro-democracy protests in Hong Kong added to investors' concerns over geopolitical tensions between Russia and Ukraine and escalating violence in Syria and Iraq. The wind down of the US Federal Reserve's bond buying programme also weighed on markets. Japan's Nikkei 225 Index dropped 1.5 percent in afternoon trading, Hong Kong's Hang Seng Index slid 1.3 percent and South Korea's Kospi 200 Index fell 0.9 percent.

Steel & Tube Holdings led the benchmark index lower, falling 1.8 percent to $2.80. A2 Milk Company dropped 1.7 percent to 58 cents. Chorus, the telecommunications network operator, declined 1.6 percent to $1.81.

"Markets are just a bit jittery because there are already a number of other risks that are out there in the world, and you add some of these pro-democracy protests in Hong Kong and it is just another reason for people to be a little bit cautious and wary," Lister said.

Air New Zealand fell 1.5 percent to $1.94. At the national carrier's annual meeting, chief executive Christopher Luxon defended its pricing on domestic regional routes, saying it's one of only a few airlines in the world servicing as many smaller towns as it does, and that such routes are often considered uneconomic. Last month, Prime Minister Key said he had told the airline it should lower regional airfares if it could, while separately, the New Zealand Airports Association lobbied the Commerce Commission to regulate the regional air fares, where the national carrier has an effective monopoly.

Goodman Property Trust, the largest property investor on the bourse, fell 1 percent to $1.06. The property investor announced Quattro Asset Management, an Australian fund manager, was in negotiations to buy two of Goodman's Auckland industrial assets. Meanwhile, in a separate announcement Precinct Properties said it was in negotiations with Quattro to sell its SAP Tower in Auckland and its Wellington 125 The Terrace. Precinct was unchanged at $1.085.

Infratil, the infrastructure investor, was unchanged at $2.83. It has finalised the A$646 million sale of its Australian energy assets, Lumo Energy and Direct Connect, to Snowy Hydro Limited. The Wellington-based company now expects annual earnings before interest, tax, depreciation and amortisations and fair value gains/losses and asset revaluations or realisations will be between $520 million and $545 million in the year ended March 31, 2015, from a previously advised range between $530 million and $560 million.

Fletcher Building, New Zealand's largest listed company, was unchanged at $8.78. Spark New Zealand, formerly Telecom Corp, rose 0.3 percent to $2.97.

Outside the benchmark index, Synlait Milk rose 2.4 percent to $3.40. The dairy manufacturer and exporter, which plans to take a quarter-stake in Sichuan New Hope Nutritional Foods Co to gain a direct interest in a Chinese infant formula brand, has been granted accreditation to manufacture retail-ready infant formula for export into China.

Allied Farmers, which is rebuilding from a disastrous takeover of the Hanover and United Finance loan books, rose 1.1 percent to 9 cents. The company, which is repaying $2 million to Crown Asset Management Ltd by selling down its stake in a subsidiary company and issuing bonds, was granted an extension by the government entity.

(BusinessDesk)