NZ shares fall; high oil prices weigh on Air NZ, Mainfreight

Mainfreight was down 2 per cent at $38.52.

New Zealand shares fell as the attack on Saudi Arabian oil facilities unnerved investors and higher oil prices weighed on transport stocks including Air New Zealand and Mainfreight.

The S&P/NZX 50 Index declined 31.66 points, or 0.3 per cent, to 10,831.75. Within the index, 26 stocks fell, 18 rose, and six were unchanged. Turnover was $68.8 million with just three stocks trading on volumes of more than a million shares.

Stocks across Asia were mixed as investors digest the drone attacks on two Saudi facilities. Brent crude oil prices rose as much as 19 percent, before settling at US$66.30 a barrel, at the end of the local trading session, up 10 percent. Hong Kong's Hang Seng was down 1 pe rcent in afternoon trading, Australia's S&P/ASX 200 index was flat, and South Korea's Kospi 200 Index rose 0.2 per cent.

"The issues in Saudi Arabia are having a big impact on the oil market and that is flowing to Air New Zealand and Mainfreight is off a bit as well," said Grant Davies, an investment advisor at Hamilton Hindin Greene.

National carrier Air New Zealand fell 1.9 per cent to $2.655 on a volume of 1.6 million shares, more than twice its 90-day average of 749,000 shares. Global logistics group Mainfreight was down 2 per cent at $38.52, rental RV operator Tourism Holdings decreased 0.7 per cent to $4.09.

Auckland International Airport was down 1.1 per cent at $9.10. The country's main gateway said international passenger numbers fell 1.2 per cent in July from a year earlier, although domestic numbers were up 1.6 per cent.

Companies held for their reliable income, including utilities and property stocks, were generally weaker.

Argosy Property led the market lower, down 2.7 per cent at $1.44 on a volume of 488,000 shares, less than its 652,000 average. The property investor extended its banking facilities with ANZ Bank New Zealand, BNZ and HSBC, and added Commonwealth Bank of Australia and Westpac to the syndicate.

Precinct Properties New Zealand was the most traded stock on a volume of 1.7 million shares, more than its 915,000 average.

Contact Energy, Genesis Energy and Goodman Property Trust were all down about 2.3 per cent at $8.40, $3.44, and $2.16 respectively.

Z Energy fell 2 per cent to $5.42 on a volume of 1 million shares, more than its 676,000 average. The country's biggest fuel retailer today said the Commerce Commission made material errors in its draft study into the country's fuel market, including misrepresenting its rate of return. Refining NZ was up 0.5 per cent at $2.11.

Kathmandu Holdings posted the day's biggest gain, up 6.2 per cent at $2.75 on a volume of 89,000 shares, almost half its 167,000 average. The retailer reports earnings on Wednesday, having last month signalled annual normalised profit rose as much as 13 per cent. Briscoe Group, which owns 19 per cent of Kathmandu, reports tomorrow. It was unchanged at $3.72.

A2 Milk and Synlait Milk were buoyed by the prospect of a takeover in Australia, where China Mengniu Dairy Co offered A$1.5 billion to buy Tasmanian formula company Bellamy's Australia. A2 rose 4.4 per cent to $14.50 and Synlait was up 3.6 per cent at $9.32. Fonterra Shareholders' Fund units were unchanged at $3.18.

Spark New Zealand fell 0.8 per cent to $4.46 on an unusually small volume of 638,000 shares. It usually trades on a volume of about 3.4 million shares.

Outside the benchmark index, Abano rose 9.1 per cent to $4.08 after the dental clinic operator confirmed it was still in talks with several potential suitors. The Australian newspaper today reported that private equity firm BGH Capital was among those pursuing the firm.

General Capital was unchanged at 6 cents after the lender received a 'BB-' credit rating from Equifax with a positive outlook.

Wellington Drive Technologies was unchanged at 18 cents after negotiating a variation to its Onimeg Investments. It will repay $1.5 million on Sept. 17 and has been given a six-month extension on another $1 million which falls due on March 31.