Market close: NZ stocks fall as investors show caution

Fisher and Paykel Healthcare fell 50c or 2.04 per cent to $24.

The New Zealand sharemarket gave up all the strong gains made last week as it became preoccupied with the latest inflation moves here and overseas.

The S&P/NZX 50 Index fell sharply at the opening and stayed low, closing down 67.38 points or 0.56 per cent to 11,912.73 after increasing 0.52 per cent last week while offshore markets fell.

There were 52 gainers and 72 decliners on the main board, with 31.79 million shares worth $96.77 million changing hands.

Mark Lister, investment director with Craigs Investment Partners, said New Zealand bucked the trend last week with offshore markets down quite sharply.

“There is a bit of nervousness with a lot of talk around the world of more interest rate rises. The latest United States consumer price index (released Thursday morning NZT) is a crucial piece of economic data for people to figure out how much the Federal Reserve will raise its rate later this month.

“So, there’s a bit of caution out there. The US reporting season starts again at the end of the week with the banks, and investors will be keeping a close eye on the financial results,” Lister said.

“Sharemarkets have had a great run in the first half of the year and there’s an expectation that they may soften further.”

Lister said there was unanimous agreement that the Reserve Bank of New Zealand will announce no change to the official cash rate on Wednesday. “But it is important to hear the bank’s latest thoughts and what they throw into the mix,” he said.

“My feeling is that we are done with rate rises but time will tell whether I’m correct. And don’t forget in the background we have a general election in three months. This will make some investors stand off until they see who is running the country.”

The local market was led down by Fisher and Paykel Healthcare falling 50 cents or 2.04 per cent to $24; Auckland International Airport decreasing 13c to $8.25; a2 Milk shedding 8c to $5.36; and Fletcher Building declining 12c or 2.19 per cent to $5.36.

Port of Tauranga was down 9c to $6.20; Freightways declined 7c to $8.53; Gentrack decreased 9c or 2.14 per cent to $4.11; Solution Dynamics fell 9c or 4.31 per cent to $2; and Steel & Tube shed 2c or 1.77 per cent to $1.11.

The energy sector was weaker, with Mercury declining 7c to $6.51; Manawa decreasing 5c to $4.95; and Vector shedding 5c to $4.05.

Utilities investor Infratil was busy with another deal. Infratil increased 8c to $10.23 after announcing it is investing US$160m (NZ$258.72m) for an 80 per cent stake in Console Connect, with Hong Kong telecommunications company HKT holding the remaining shareholding.

HKT and Infratil will jointly invest up to US$295m ($477m) over two years to grow the Console platform, which offers next-generation automated connections to data centres, partners, cloud and other applications. The investment will include new subsea cable systems.

Infratil needs regulatory approval in 12 countries and the conditional agreement with HKT is expected to be completed by the third quarter of next year.

Channel Infrastructure rose 6c or 3.97 per cent to $1.57 after announcing the sale of decommissioned parts from the former Marsden Point oil refinery to United States-based Seadra Energy for US$33.875m ($54.83m).

Seadra has made a US$4m ($6.4m) option payment for a six-month window to consider buying certain assets from the hydrocracking facility.

Lister said the Channel asset sale looks positive in terms of pricing and is a step in the transformation of the refinery to a fuel import terminal.

Napier Port, unchanged at $2.38, told the market that container volume for the nine months ending June declined 10 per cent to 175,000 TEUs (20-foot equivalent units) compared with the previous corresponding period, and bulk cargo was down 16.4 per cent to 2.3 million tonnes, with log exports falling 16.1 per cent to 1.75 million tonnes.

Container movements fell 31.6 per cent to 56,000 TEUs and bulk cargo declined 28.6 in the third quarter because of weather damage to season crops including apples, and the closure of Pan Pac’s wood processing plant. Logs were down 21.4 per cent to 609,000 tonnes.

Wine exporter Delegat Group gained 15c to $8.95; Hallenstein Glasson was up 10c to $6.05; Vista Group added 4c or 2.29 per cent to $1.79; Serko increased 7c or 1.79 per cent to $3.97; and Sky TV added 4c to $2.39.

Other gainers were Burger Fuel up 1.5c or 5.56 per cent to 28.5c; Bremworth increasing 2c or 5.13 per cent to 41c; Move Logistics gaining 2c or 2.5 per cent to 82c; 2 Cheap Cars rising 4c or 10.53 per cent to 42c; AFT Pharmaceuticals collecting 14c or 3.91 per cent to $3.72; and Metro Performance Glass up 1.6c or 11.43 per cent to 15.6c.

Stride Property, up 1c to $1.45, announced the sale of two industrial properties in Auckland for a total of $43.5m, above the combined book value. As well, the sale of an office building on The Terrace in Wellington is expected to settle at the end of the month and will reduce Stride’s loan to value ratio to about 36 per cent.