MARKET CLOSE: Shares fall; MRP, Meridian, Contact drop as investors cash up

New Zealand shares fell led by MightyRiverPower, Meridian Energy and Contact Energy as investors cashed in profits on recent gains in power company stocks. Rakon rose to a 21-month high as it flagged a return to profitability.

The NZX 50 Index fell 25.144 points, or 0.5 percent, to 5462.743. Within the index, 23 stocks fell, 14 rose, 13 were unchanged. Turnover was $124 million.

The benchmark index has gained 6.1 percent over the last three months, in large part bolstered by the global search for yield in a low interest rate environment. Energy generators and retailers, favoured for their reliable income, have advanced solidly in the lead up to and since the Sept. 20 general election, which removed any threat of further regulation to push down retail electricity prices.

Partially-privatised gentailer MRP, which has gained 27 percent since the start of the year, dropped 2.9 percent to $3.025. Fellow state-controlled power companies, Meridian, which has soared 38 percent in the past three months, declined 2 percent to $1.695, and Genesis Energy, which has gained 16 percent, was unchanged at $2.13. Contact fell 1.4 percent to $6.28.

"Things are easing back after a strong run," said Mark Lister, head of private wealth research for Craigs Investment Partners. "We've really seen MightyRiverPower and Meridian and Contact come off a little bit, they've obviously had a very, very strong run in recent weeks and months. They're giving back a few of those gains as a few people take some profit."

Spark New Zealand, formerly known as Telecom Corp, fell 1.5 percent to $3.19, and has advanced 12 percent over the past three months. Ebos Group, the healthcare and animal care company, declined 1.3 percent to $9.62 and has climbed 10 percent in the past month. Fisher & Paykel Healthcare, the breathing apparatus manufacturer and exporter, dropped 2.2 percent to $5.42, giving up some of its 13 percent gain in the past 3 months.

Fletcher Building rose 0.1 percent to $8.46. The construction and building supplies company's director Gene Tilbrook will step down from the board of New Zealand's largest listed company in the first quarter of 2015 because of other commitments.

Pacific Edge was unchanged at 84 cents. The non-invasive bladder cancer test developer appointed Spark's former finance performance manager Kate Rankin as its chief financial officer as it continues its push into overseas markets.

NZX, the stock market operator, rose 0.8 percent to $1.20. Telstra Health, a unit of Australia's largest telecommunications business Telstra Corp, bought 2 percent of Orion Health Group in the healthcare management software developer's bookbuild last week in the lead up to its listing later this month.

Outside the benchmark index, Rakon rose 4.4 percent to 36 cents, its highest in 21 months, after the high-tech components manufacturer flagged a return to profitability is looming, though investors will have to wait and see if they get a dividend.

"It's a company that has been a terrible performer for many years and has languished at that very low level," Lister said. "Any positive news will be taken well by long suffering shareholders in Rakon."

(BusinessDesk)