MARKET CLOSE: Shares fall paced by Warehouse; Air NZ gains on tumbling oil prices

New Zealand shares fell, paced by Warehouse Group and Pumpkin Patch as investors mulled the health of the retail sector. Air New Zealand gained on falling oil prices.

The NZX 50 Index fell 2.014 points, or 0.03 percent, to 5455.378. Within the index, 22 shares fell, 19 rose and nine were unchanged. Turnover was $86.2 million.

Warehouse fell 1.9 percent to $3.09. New Zealand's largest listed retailer, which is struggling to grow earnings, has advised sales heading into the peak Christmas season have been "soft". Outside the benchmark index, Pumpkin Path tumbled 16 percent to a record low of 21 cents. The childrenswear retailer told shareholders earlier this week it is at risk of breaching its banking covenants if Christmas season sales disappoint.

"The retail sector, across the board, there hasn't been a lot of good news," said Mark Lister, head of private wealth research at Craigs Investment Partners. "The jury is still out on whether the retail sector is past the worse. They're definitely still doing it tough and you'd think with the economy going alright we might be set to have a pretty decent Christmas in terms of spending and so-forth."

Air New Zealand was the best performer on the benchmark index, climbing 5.4 percent to $2.34, after yesterday saying "should the current level of jet fuel price persist, there will be significant additional improvement in earnings" in its second half. Oil price futures are at their lowest level in more than four years as the market weighs whether a meeting of the Organisation of Petroleum Exporting Countries will see them cut supply to bolster falling oil prices.

"It's had a very good run over the last few weeks," Lister said. "One of the key things is oil prices which are down strongly, and oil being a major input cost for Air New Zealand, that's a real positive for them."

Infratil, the energy and infrastructure investor, led the benchmark index lower falling 5.1 percent to $2.87 after shedding rights to it 19.5 cents interim and special dividend yesterday.

Tower rose 1 percent to $1.96 after the general insurer reported a 32 percent drop in annual profit to $23.6 million while improving its underlying earnings in general insurance, and signalled plans for another share buyback.

Fletcher Building, the construction and building supplies company, fell 1 percent to $8.12. Spark New Zealand, formerly Telecom Corp, slipped 0.8 percent to $3.105. Ryman Healthcare, the retirement village operator, gained 1.4 percent to $8.22.

Outside the benchmark index, Gentrack Group, which develops utilities and airports software, climbed 4.2 percent to $2.24, but still below its July offer price of $2.40, after it reported a 49 percent drop in full-year profit to $3.4 million, missing its initial public offer forecast, but beating the downgraded guidance it gave just five weeks after listing on the share market.

"That's a stock that has had a pretty rough ride and disappointed the market with a surprise downgrade five minutes after it arrived which didn't do wonders for their reputation," Lister said. "They're starting to rebuild that with their result and guidance for next year which is in line with original forecasts."

Opus International Consultants fell 0.7 percent to $1.47 after the listed engineering firm said it has trimmed its executive team to eight from 12 as it restructures its business "in an increasingly competitive market".

Mowbray Collectables, the listed stamp and collectables dealer and auction house, was unchanged at 41 cents after it flagged a first-half operating loss of $709,000 and said it is in discussion with bankers to stay solvent after a $1.28 million write-down on its goodwill.

Energy Mad, the energy efficient lightbulb marketer, dropped 13 percent to 14 cents after it narrowed its first-half loss after a year earlier impairment washed through, though widened its operating loss on flat sales and as it shifts focus to LED lightbulbs.

On the NZ Alternative Index, Chatham Rock Phosphate, the company proposing to mine phosphate nodules from the seabed on the Chatham Rise, advanced 7.7 percent to 14 cents after it reported a near-tripling of its first-half loss to $1.87 million as it spent more on exploration, sought a listing on London's AIM market and applied for a marine consent.

Trilogy International, the skincare and scented candle company, jumped 9.4 percent to 70 cents after turned to a profit of $984,000 in its first half as a boost in sales for its Ecoya range in Australia helped the unit reach profitability.

(BusinessDesk)