New Zealand stocks fell as Sky Network Television extended its slide after last week's earnings downgrade and Air New Zealand fell after agreeing to settle a cartel lawsuit in the US.
The S&P/NZX 50 Index dropped 13.04 points, or 0.2 per cent, to 6885.06. Within the index, 28 stocks fell, 14 rose and seven were unchanged. Turnover was $136.7 million.
Sky Network Television was the worst performer, falling 7.1 per cent to $4.30 - a two-month low. On Friday, the shares sank 15.7 per cent after the pay-TV operator said subscriber numbers were expected to fall further this financial year, causing earnings next year to miss analyst estimates.
The Auckland-based company forecast it would have 830,000 subscribers at the end of its financial year on June 30. Subscriber numbers dropped 1.5 per cent last year to 851,561. It expects to lose 45,000 core residential pay-TV subscribers this year and gain about 25,000 subscribers for its online services such as Neon and FanPass.
"The subscriber numbers have really given them a kick in the guts," said James Smalley, director at Hamilton Hindin Greene. "There were a few institutional investor roadshows and I think Australian investors bought in. It just goes to show how institutional investors buying in can sometimes push a stock way higher than it should be on its fundamentals."
New Zealand Refining Co dropped 3.5 per cent to $2.80, while ANZ Banking Group fell 2.7 per cent to $26.10.
Air New Zealand shed 2.5 per cent to $2.30 - an 18-month low. The national carrier has agreed to a US$35 million settlement in a class-action lawsuit in the US taken by freight forwarding companies who claimed airlines colluded over cargo fuel and security surcharges between 2000 and 2006. The airline has not admitted being part of the alleged conspiracy as part of the settlement.
Trade Me Group fell 1.9 per cent to $4.65 and Steel & Tube Holdings declined 1.8 per cent to $2.18.
Restaurant Brands was the biggest gainer, up 2.9 per cent to $5.35. The fast-food company has gained 7 per cent since April 14, when it said 2017 earnings could rise as much as 25 per cent on growth in both KFC and Pizza Hut, and its expansion into New South Wales.
Contact Energy rose 2.5 per cent to $5.28 and Westpac Banking Corp advanced 1.1 per cent to $33.35.
Outside the main index, APN News & Media had its shares halted on the ASX pending an announcement about a potential material transaction involving the New Zealand assets. The dual-listed shares last traded at 72c on the NZX, and Smalley said they were very thinly traded.
Tourism Holdings rose 0.4 per cent to $2.68. Milford Asset Management became the largest single shareholder after Sterling Grace exited its holding. Milford has raised its stake to 17.8 per cent.