Market close: NZ shares lower after sharp afternoon fall

Shane Solly, portfolio manager with Harbour Asset Management, said there was three to four reasonable initial public offers doing the rounds. Photo / NZME

The New Zealand sharemarket had a quiet day with few significant moves amongst the leading stocks – but there's plenty going on behind the scenes.

The S&P/NZX 50 Index fell sharply in the afternoon and closed at 13,079.51, down 19.79 points or 0.15 per cent, after reaching a high of 13136.30 during the morning.

There were 66 gainers and 73 decliners across the whole market, with 54.28 million shares worth $161.74 million changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said market volume was low and people were focusing on video conferences and company presentations, including new listings.

"There's three to four reasonable initial public offers doing the rounds – and there is a robust undertone, even if the market is not showing this," he said.

Stride is spinning off its office property fund Fabric for a listing next month, and telecommunications companies 2degrees and Vocus NZ are expected to join the NZX market by the end of the year.

Solly said there was a vacuum of corporate news on the market and investors instead were concentrating on macro-economic events.

"We saw a strong rally on Wall Street overnight after the latest manufacturing activity statistics for the east coast of the US came in higher than expected. And our own massive June second quarter gross domestic product (GDP) was against expectations, but it didn't set the market alight," he said.

"We have share buy-backs from the banks, companies going ex-dividend, and if the ($2 billion) Z Energy takeover by Ampol gets over the line, there will be a lot of cash sloshing around to be redeployed on the market. This does underpin demand for stocks."

The GDP growth for the second quarter was 2.8 per cent, ahead of economists' estimates of 1.1 per cent to 1.7 per cent. ANZ said that with Alert Level 4 dragging on in Auckland, its forecast of a 6 per cent contraction in the September third quarter was starting to look a little optimistic.

Ebos Group, up 51c to $35.53; Mercury Energy increasing 12.5c or 1.96 per cent to $6.51; and Infratil gaining 9c to $7.94 were three of the bigger improvers amongst the leading stocks – with the small caps dominating the main list of gainers and decliners.

Heartland Group Holdings gained 5c or 2.17 per cent to $2.35; Comvita picked up 6c to $3.73; Third Age Health Services rose 10c or 4.29 per cent to $2.43; Harmoney was up 4c or 1.95 per cent to $2.09; Scott Technology increased 5c or 1.75 per cent to $2.90; and Enprise Group climbed 14c or 6.93 per cent to $2.16.

Five stocks went ex-dividend. Marsden Maritime Holdings still gained 9.2c to $6.45; Port of Tauranga was up 1.5c to $7.20; Freightways was down 15c to $12.59; Spark declined 2.5c to $4.77; and SkyCity Entertainment decreased 3c to $3.21.

Mainfreight fell $2.58 or 2.71 per cent to $92.52; Briscoe Group declined 7c to $7.17; DGL Group fell 26c or 8.23 per cent to $2.90; Argosy Property shed 3c or 1.82 per cent to $1.62; Stride Property lost 6c or 2.3 per cent to $2.55; and Goodman Property Trust was down 4c to $2.53.

Restaurant Brands had a 45c or 2.85 per cent fall to $15.35; and Serko was down 13c to $7.87.

Other decliners were Michael Hill International shedding 2c or 2.27 per cent to 86c; Napier Port declining 7c or 2.15 per cent to $3.19; NZX down 4c or 2.29 per cent to $1.71; Accordant Group falling 5c or 2.73 per cent to $1.78; and Move Logistics decreasing 4c or 2.52 per cent to $1.55.

Contact Energy declined 3c to $8.01 after providing its August operating report which showed mass market electricity and gas sales declined slightly to 436GWh compared with 450GWh for the same month last year. South Island hydro storage was at 138 per cent of historical average and North Island at 83 per cent.

Meridian's New Zealand August retail sales volumes were 12.2 per cent higher than the same month last year. In the month to September 10, Meridian's national hydro storage increased from 103 per cent to 126 per cent of historical. Its share price gained 2.5c to $5.175.

Z Energy told the market the fuel volume decline has been less than experienced during last year's nationwide lockdown, and any downturn has been mitigated by managing costs. Z Energy re-affirmed its full-year operating earnings (ebitdaf) forecast of $270m-$310m and 2022 total dividend of 19-23c a share. Its share price edged ahead 1c to $3.46.