New Zealand shares were mixed yesterday. Fonterra Shareholders’ Fund sank after dairy prices fell overnight, Spark New Zealand declined as one major broker ranked the stock ‘under-perform’, while Chorus rose.
The NZX 50 Index edged down 1.37 points, or 0.02 per cent, to 5755.79. Within the index, 18 stocks fell, 18 rose and 14 were unchanged. Turnover was $130 million.
Overnight dairy product prices fell for the fifth consecutive GlobalDairyTrade auction to the lowest level since August 2009.
Investors are weighing the economic outlook for companies against the possibility of lower interest rates. Units of Fonterra Shareholders’ Fund, which give holders access to Fonterra Co-operative Group’s dividend stream, extended their decline, down 0.4 per cent to a record low close of $4.85.
“The whole market has gone into a consolidation phase,” said Grant Williamson, director at Hamilton Hindin Greene. “The economic picture has probably just deteriorated a little bit, particularly on the back of those dairy prices, so buyers are being cautious.”
Government-controlled energy companies, which were pushed to record levels earlier in the year, fell as investors looked to book profits. Meridian dropped 2.6 per cent to $2.26. Genesis Energy fell 1.3 per cent to $1.89. Mighty River Power declined 1.2 per cent to $2.935.
Spark New Zealand dropped 0.4 per cent to $2.81. Chorus, the telecommunications infrastructure operator, advanced 2.6 per cent to $3.165. Both are awaiting a late year announcement from the Commerce Commission on the regulated price of copper-based broadband services. Chorus owns the network and Spark is the largest user of it. Spark is pushing a customer campaign to force the commission to justify a draft decision favouring Chorus.
Goodman Property Trust was unchanged at $1.14. The property investor, which has teamed up with Singapore government-owned GIC to develop the Auckland Viaduct Quarter, lifted annual earnings 5.4 per cent to $97.9 million on higher rental revenue while reducing costs.
Outside the benchmark index, Cavalier Corp was unchanged at 36c after Colin McKenzie stepped down as managing director and chief executive of the carpet maker ahead of asset write-downs that will result in a full-year loss.
“Cavalier came out with another disappointing announcement, probably not unexpected but just its earnings outlook is going to be at the lower end of the range,” Williamson said.
“A bit of positive news there, that they’re going to get a little bit more focused on what they’re getting good at. The market has taken it pretty much in its stride, so there will be a few bargain hunters thinking eventually the company has got to turn around.” —BusinessDesk
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