Market close: Shares fall, Sky TV tumbles on regulator probe

BUSINESSDESK: New Zealand shares fell, led by the News Corp-controlled Sky Network Television, after the regulator said it will investigate the pay-TV company's content deals with internet service providers. 

Fisher & Paykel Healthcare led gains among stocks that benefit from a weaker kiwi.

The NZX 50 Index fell 20.40 points, or 0.6%, to 3514.50. Within the index, 30 stocks fell, 10 rose and 10 were unchanged. Turnover was $122 million.

Sky TV fell about 7% to $5.07 after the Commerce Commission said it would probe whether its content contracts with ISPs hinders competition in New Zealand’s pay-TV market.

The regulator approved Sky’s Igloo venture with Television New Zealand, a low-cost pay-TV platform.

"Any regulator uncertainty will weigh on the stock," said Michael Milne, investment advisor at Craigs Investment Partners .

"It will be an ongoing overhang for the stock" though today's decline was "a wee bit of an overreaction. I wouldn't be surprised to see it recover a bit because it has a good dividend".

Sky TV's dividend yield is 5.9%.

F&P Healthcare, which gets more than 50% of its revenue in US dollars, rose 3.9% to $2.39, leading gainers on the NZX 50 as the New Zealand dollar fell to a 4.5-month low against the greenback.

"The bulk of their sales are to the US market so any fall in the New Zealand dollar will benefit them," Mr Milne said.

Oceanagold, which operates the Macraes gold field, extended its slide, falling 3.5% to $2.22 as the price of gold weakened.

"The gold price has come back a long way and I think investors are looking for a safe haven and are turning to the US dollar rather than gold," Mr Milne said.

Uncertainty in Europe is helping lift the greenback as a haven, while weighing on prices of commodities. Dairy product prices drop to new three-year low in Fonterra’s GDT auction overnight.

PGG Wrightson, the nation's biggest rural services company, gained 3% to 33 cents. Rakon, which sells its crystal oscillators worldwide, gained 3.9% to 54 cents.

Trade Me, the auction site spun off from Australia's Fairfax Media in December, rose 0.8% to a record $4.05.

"Part of it is that it's something a wee bit new," Mr Milne said. "It is a really good business and its an area that has got exposed to new markets."

Contact Energy, the biggest power company on the NZX 50, rose 1.5% to $4.90. Fletcher Building declined about 1% to $6.23.

Telecom, the biggest company on the bourse, fell 1.2% to $2.535.