Market commentaries

WELLINGTON: New Zealand shares dropped yesterday after Fonterra Cooperative Group cut its dividend forecast, weighing on the Fonterra Shareholders’ Fund and A2 Milk Co.

Steel & Tube Holdings plunged to a 17year low after warning of a fullyear loss.

The S&P/NZX 50 Index fell 60.09 points, or 0.7%, to 8553.23. Within the index, 20 stocks fell, 19 rose and 11 were unchanged. Turnover was $171 million.

Fonterra Shareholders’ Fund units led the index lower, dropping 6.8% to $5.35. The cooperative has raised its forecast farmgate milk price for the 2018 and 2019 seasons while cutting its projected dividends for 2018.

It raised its forecast milk price for this season by 20c to $6.75 per kilogram of milk solids and gave an opening price forecast for 2019 of $7/kgMS, but cut its forecast dividend range for the current year to a range of 1520c a share, from a previous forecast of 2535 cents.

A2 Milk dropped 4.4% to $10.24. The stock has fallen 22% since last week, when it reported a 70% increase in revenue for the nine months to March 31.

Auckland International Airport fell 2.4% to $6.59 and Comvita dropped 2.3% to $5.93.

Argosy Property was the best performer, up 2.5% to $1.045. It lifted annual earnings 2.1% on flat rental income and said it will cut its retail exposure over the next 18 months.

Sky Network Television rose 1.7% to $2.39, Metlifecare gained 1.7% to $6, and Chorus advanced 1.6% to $4.12.

Outside the benchmark index, Steel & Tube plunged 18.2% to $1.62, the lowest it has closed since May 2001. It expects to post a loss before interest and tax (ebit) of about $38 million this financial year, from positive ebit of $31.1 million a year earlier, and breach its banking covenants.

It said normalised ebit would be about $16 million, excluding nontrading costs and impairments of up to $54 million.

Serko dropped 8.7% to $2.74. The online travel booking software developer reported a maiden annual profit ahead of an expansion into the northern hemisphere and a planned ASX listing next month.

A The Australian sharemarket closed slightly lower yesterday as steep falls in the energy and healthcare sectors offset gains in the telco, utilities and real estate sectors.

Santos shares dropped 54c, or 8.4%, to $5.90 after the oil and gas producer rejected the recently upgraded offer from United States private equity firm Harbour Energy, and terminated its negotiations.

Beach Energy dropped 3.6% to $1.74, Woodside Petroleum shed 1.2% to $33.80 and Oil Search dropped 1.9% to $8.41.

In the healthcare sector, CSL dropped 1.1% to $182.30 and Cochlear shed 0.8% to $194.67.

Westpac was the only major bank not to fall, adding 0.1% to $28.46, while Commonwealth Bank was the weakest of the big four, dropping 0.6% to $69.81 after agreeing to sell its stake in Chinese life insurer BoComm Life for $668 million. By late afternoon, the benchmark S&P/ASX200 was down 9.4 points, or 0.16%, at 6032.5 points. The broader All Ordinaries index was down own 9.7 points, or 0.16%, at 6140.2 points

The SPI200 futures contract was down six points, or 0.1%, at 6041 points. National turnover was 2.8 billion securities traded worth $6.2 billion. — BusinessDesk/AAP