New Zealand shares fell after energy companies weighed on the market as investors made room in their portfolios ahead of the listing of Genesis Energy next month. Vector, Meridian Energy, MightyRiverPower and Contact Energy fell.
The NZX50 Index fell 35.396 points, or about 0.7 percent, to 5124.994. Within the index, 27 stocks fell, 13 rose and 10 were unchanged. Turnover was $349 million, one third of which was Xero.
Genesis, New Zealand's largest electricity retailer by customer base, is the last on the block in the government's partial privatisation programme which saw it sell minority holdings in Meridian and MightyRiverPower. A Forsyth Barr note labelled Genesis attractive based on its "turbo charged" dividends but questioned the company's ability to sustain the high yield.
Vector, the Auckland based lines company, dropped 4.7 percent to $2.46. Government controlled Meridian fell 1.4 percent to $1.095 while Contact slippe 1.3 percent to $5.30. MightyRiverPower declined 0.5 percent at 2.10.
"Investors that have taken advantage of the Meridian Energy and MightyRiverPower sales will probably look to potentially make room for Genesis by lightening up on one of those two," said Robert Garden an advisor at Craigs Investment Partners. "Meridian and MightyRiverPower have rallied over the last week or two which was on the back of the poll showing National had a pretty strong lead in the polls."
The opposition Labour and Green parties have pledged to restructure the energy sector, making a single, centralised electricity buyer to push down prices, squeezing company margins and returns to shareholders. A general election is scheduled for this September, and polls indicate the National government will return for a third term.
Xero, the cloud-based accounting software firm, dropped 2.4 percent to $43.45, as a record daily trade of $113 million, or about 2 percent of the company, changed hands. Ryman Healthcare fell 5.9 percent to $8.20, with $71 million of its stock passing through the bourse.
Clothing chain Hallenstein Glasson tumbled 8.2 percent to $2.80 to be the day's worst performer. Today is the last day for the retailer on the benchmark index after declining 21 percent this year to be the worst performer on the NZX50. Pacific Edge rose 0.7 percent to $1.55. The bladder cancer detection test developer whose shares have gained 16 percent this year will take the retailer's place.
Kathmandu Holdings fell 1.5 percent to $3.34. The outdoor goods retailer is due to report earnings on Monday.
"Following what we have seen out of Hallensteins, Pumpkin Patch, even the Warehouse has been a wee bit softer lately, so it is probably a slight concern there about the numbers they're going to be producing next week," Garden said.
Pumpkin Patch rose 1.8 percent to 56 cents. The children's clothing retailer sank 19 percent to a record low of 55 cents this week, after the company reported a 98 percent drop in profit for the six months ended Jan. 31.
Brisbane-based jeweller Michael Hill International dropped 1.5 percent to $1.34. Online auction website Trade Me Group gained 1.5 percent to $3.99. Warehouse Group, New Zealand's largest listed retailer was unchanged at $3.20.
Telecom fell 0.6 percent to $2.375. Auckland International Airport was unchanged at $3.88 and Fletcher Building, New Zealand's largest listed company, rose 1.9 percent to $9.77.