Market close: shares fall - Xero, Ryman drop from highs, Kathmandu gains

New Zealand shares fell as market shooting stars such as Xero and Ryman Healthcare retreated from record highs, while Kathmandu, A2 Corp and Fonterra Shareholders' Fund advanced.

The NZX 50 Index fell 11.35 points, or 0.2 percent, to 4603.01. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $111 million.

Xero, the cloud-based accounting firm whose shares have soared on expectation it will eventually convert sales growth into earnings, slipped 11 percent to $13.30. Diligent Board Member Services, up 38 percent this year, fell 3.9 percent to $7.25.

"Aggressive new investors have been pushing those shares higher - it's not unusual to have a pause," says Shane Solly, portfolio manager at Mint Asset Management.

Ryman, the retirement village operator that has delivered a decade of earnings growth, fell 1.6 percent from a record to $6.

Yet rival Summerset Group, which yesterday told shareholders its building programme is on track for 2013, gained 2.6 percent to a record $3.16 and Metlifecare rose 2.5 percent to $3.64, the highest in more than four years.

A2 Corp, which markets milk with a protein variant said to have health benefits, rose 5.7 percent to 74 cents after an Australian investors briefing that emphasised its production capacity across the Tasman.

"People searching for investment options are going wider and deeper than they have for quite a while," Mr Solly says.

Units in the Fonterra fund rose 3.2 percent to a record $8.06 after announcing plans to eliminate up to 300 jobs as it seeks to free up $65 million a year to allocate into its growth strategy.

Kathmandu, the outdoor equipment chain, rose 9.3 percent to $2.46, leading gainers on the NZX 50 after telling investors at a Macquarie conference in Sydney that sales rose 13 percent to $89.7 million in the 13 weeks ended April 28, maintaining the momentum in revenue growth from the first half of the financial year.

"People had been anticipating a bit of weakness with the weather being a bit warm at the start of winter," Mr Solly says. "The key for them will be the winter sale. That will show if they ended up with too much stock on their hands."

Fletcher Building, the biggest company on the NZX 50, fell 2.4 percent to $8.63, weighing on the index. Telecom fell 0.8 percent to $2.585.

Sky City Entertainment Group rose 1.6 percent to $4.53 as investors anticipate an outcome on the convention centre debate in Auckland.

Dorchester Pacific, which avoided failure in 2010 by convincing investors to accept a debt-for-equity swap, soared 17 percent to 34 cents after upping its profit guidance, flagging an intention to start paying dividends and saying it will rejig its capital structure to help fund future acquisitions.

(BusinessDesk)