Market close: shares slide, paced by F&P Healthcare - Fletcher also dips

New Zealand shares fell, paced by Fisher & Paykel Healthcare as the kiwi dollar rose, and Fletcher Building, which faces a sluggish market in Australia.

The NZX 50 Index fell 1.99 points, or 0.04 percent, to 4395.20. Within the index, 22 stocks rose, 17 fell and 11 were unchanged. Turnover was $112 million.

F&P Healthcare, which makes respirators and sleep apnea masks, fell 2.8 percent to $2.47. The manufacturer gets more than 50 percent of its sales in US dollars and the kiwi reached a two-month high 84.95 US cents, eroding the value of revenue repatriated to New Zealand.

The trade-weighted index is at a post-float high.

The strong kiwi "has been particularly unhelpful to them", says Matthew Goodson, portfolio manager at BT Funds Management. Still, "what really matters is the underlying US earnings stream, which has grown significantly".

Fletcher Building, the biggest company on the benchmark index, fell 1.7 percent to $8.50 as investors tried to gauge the earnings outlook in the face of tepid Australian demand and better times ahead for New Zealand, while it battles against imported building materials benefiting from the high kiwi and Australian dollars.

"There's no company in our market with a wider dispersion of earnings forecasts," Mr Goodson says." The outlook for the New Zealand earnings cycle is clearly positive and the outlook for Australia is mixed."

Steel & Tube Holdings, which sells steel products to the construction industry, fell 2.3 percent to $2.61. Nuplex Industries, the specialty chemicals used in paints and adhesives maker, slid 0.9 percent to $3.31.

Methven, the tapware manufacturer, fell 1.6 percent to $1.20, an 11-month low, after saying full-year profit fell about 21 percent on weaker trading in the Australian market.

"The continued decline in Australian market demand has resulted in our Australian business's second-half ebitda being down around 13 percent on the prior year, more than offsetting the first-half gains," outgoing chief executive Rick Fala says.

Children's clothing chain Pumpkin Patch declined 0.9 percent to $1.15.

Telecom rose 1.7 percent to $2.44, helping offset major decliners on the NZX 50.

Mr Goodson says the phone company's top line will gradually decline over time, "but they are now taking out costs at a very rapid rate".

The country's biggest telecommunications company today said it has dumped the architect of its mobile network Alcatel-Lucent in favour of Chinese heavyweight Huawei to build its 4G infrastructure.

Jeweller Michael Hill International was unchanged at $1.34 after saying sales in the first nine months of the year rose 8.8 percent on revenue gains in its biggest markets of Australia and New Zealand.

Contact Energy, the biggest power company on the bourse, rose 1.3 percent to $5.57. The company has been helped by the sale documents for Mighty River Power, which suggest Contact is trading at a lower multiple than its state-owned rival.

NZ Oil & Gas was the biggest gainer on the day, rising 1.8 percent to 85.5 cents. Retailer Warehouse Group rose 1.7 percent to $3.60 and units in the Fonterra Shareholders' Fund rose 1.8 percent to $7.50.

(BusinessDesk)