Shares fall as power companies still plagued by smelter; property rises

Power company stocks fell. Photo / 123RF

New Zealand shares fell, as investors continued to assess the impact of Rio Tinto's threat to close the Tiwai Point smelter. However, property stocks had a strong day, led by Vital Healthcare Property Trust.

The S&P/NZX50 50 Index declined 26.13 points, or 0.2 per cent, to 10,761.69. Within the index, 29 stocks fell, 15 rose and six were unchanged. Turnover was $117.2 million

Vital Healthcare Property Trust led property stocks higher, lifting by 1.5 per cent to $2.70, as 200,000 shares changed hands. Ryman Healthcare rose by 1.4 per cent to $13.09 while Argosy Property lifted 1.5 per cent to $2.70 and Precinct Properties New Zealand gained 1.4 per cent to $1.85. Kiwi Property Group was unchanged at $1.59 having raised $180m at $1.58 per share earlier this week.

"Property has been relatively robust and I suppose that's the reliable income stream as most are paying a quarterly income," Craigs Investment Partners advisor Chris Timms said, adding that retirement village operator Ryman benefited from a respite in the North Island property market especially.

"It has been reasonably quiet day considering Merdian has only traded about 1.5 million shares compared with 3 million over the last few days," Timms said.

Contact Energy was the worst of the electricity generator-retailer stocks, falling by 2.3 per cent to $7.21. Trustpower was down 1.5 per cent at $8.31, Mercury fell 1.3 per cent to $4.90 and Meridian was down by about 1.7 per cent at $4.52.

"There was a flurry since the [Tiwai point] announcement and a lot of the impetus has been taken out and people have decided to move on have done so," he said.

"All of the gen-tailers have been relatively light today but still weaker."

Vista Group International was the day's biggest decliner, falling by 3.1 per cent to $3.78, although on relatively light volumes as fewer than 100,000 shares traded hands compared to its 90-day average of 449,000.

Bank stocks also fell, with Australia and New Zealand Banking Group down by 1.7 per cent at $28.30 after yesterday it said New Zealand net profit fell 8 per cent to $1.83 billion in the 12 months ended September 30. Westpac Banking Group, which reports next week, fell by 0.5 per cent.

Sky Network Television declined by 1.1 per cent and closed at 89 cents, having lost about half its value so far this year.

Today, the pay-TV operator revealed more detail about the 5 per cent stake it gave NZ Rugby in order to secure broadcasting rights. Sky issued 21.8 million shares at 92 cents per share, valuing the stake at $20.07m. ‬The deal also includes a condition that NZ Rugby must give at least 10 working days notice if it wants to sell the shares after the agreed two-year minimum period.

Shares of Kathmandu Holdings dipped 0.3 per cent to $3.13. The company today said group chief operating officer Reuben Casey will head the Kathmandu business following its $368m acquisition of Rip Curl while Michael Daly will remain head of the Rip Curl business. Group chief executive Xavier Simonet continues as head of the whole group.

Shares of Skellerup declined 1.3 per cent to $2.27. Today the rubber goods maker announced it purchased UK based Silclear for £3.3m ($6.6m) in a deal which it said would be immediately earnings accretive.

Scott Technologies rose by 3.4 per cent to $2.45. This week the government announced the Dunedin-based company will receive a $5.8m loan from the Provincial Growth Fund to set up an agriculture technology business unit.

Investors will be looking ahead to the next Reserve Bank announcement later this month, Timms added, noting Westpac has questioned whether the central bank is going to cut interest rates despite that being predicted by most.