New Zealand shares fell, led by SkyCity Entertainment Group, which resumed trading after completing the institutional component of its capital raising. Xero extended its gains after reducing its cash burn and saying it won't need more capital to get to breakeven.
The S&P/NZX50 Index fell 2.45 points, or 0.04 per cent, to 6914.12. Within the index, 24 stocks gained, 15 fell and 11 were unchanged. Turnover was $113.5 million.
SkyCity fell 3.1 per cent to $4.80 after coming off a trading halt. The casino and hotel company said it raised $180 million of the $263 million it is targeting in the institutional component of its share sale at $4.40 a share, with the shortfall mopped up at $4.85 a share.
SkyCity will begin the retail part of the one-for-10 capital raise today. It is raising the funds to enable it to keep debt in check and maintain its credit rating while funding expansion in Auckland and Adelaide.
David Price, a broker at Forsyth Barr, said large institutions had used the offer to top up their holdings and there was less demand for the shares on the market yesterday as a result.
"If you did want to get set in the stock, that was a good way of doing it," Price said. "This is like a liquidity event what we've seen today."
He didn't expect a major selloff from here, with support likely to come back at around current levels.
Spark New Zealand declined 1.8 per cent to $3.605 and Precinct Properties New Zealand fell 1.5 per cent to $1.28. Among other property investors, Kiwi Property Group was unchanged at $1.495 after reporting an 118 per cent jump in full-year profit to a record $250.8 million on an increase in its portfolio value, higher rental returns, and lower costs including interest charges.
Vital Healthcare Property Trust fell 0.7 per cent to $2.13 and Property for Industry slid 0.6 per cent to $1.65.
Genesis Energy fell 1.4 per cent to $2.115 and Contact Energy declined 0.8 per cent to $5.29 ahead of an Electricity Authority briefing today on its transmission pricing decision.
Xero rose 5.3 per cent to $17.42, extending its 7.3 per cent gain on Friday when the cloud-based accounting software company posted a 67 per cent gain in revenue to $207 million while its net loss widened to $82.5 million.
Xero said it burned through $86 million in the latest year, down from $88 million a year earlier, and its cash holdings stood at $184 million at March 31, meaning it had enough left to reach breakeven without having to raise more capital.
Fonterra Shareholders' Fund rose 0.7 per cent to $5.77. Fonterra yesterday said milk collection was down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices.
ERoad fell 3 per cent to $2.55 after the logistics and fleet management company cut its 2016 earnings guidance to a loss of up to $1.6 million instead of a prospectus forecast of a $5.5 million profit. BusinessDesk