Trump failure reflected in sharemarket

Summerset leads index lower with Trade Me and Metro Performance Glass also falling

New Zealand shares fell amid concern the failure of US President Donald Trump to push through reforms means American growth won’t be as robust as some investors had hoped, denting global sentiment. Summerset Group, Trade Me and Metro Performance Glass led the decline.

The S&P/NZX 50 Index fell 11.11 points, or 0.2 per cent, to 7062.72. Within the index, 23 stocks fell, 22 rose, and five were unchanged. Turnover was $147 million.

With little local news, the exchange took its lead from Wall St, where the Dow Jones Industrial Average and the Standard & Poor’s 500 ended lower last week after Trump’s failure to push healthcare reforms through a Congress stacked with Republicans. Trump has said he will now focus on cutting taxes.

“If he was to get through with those corporate tax changes, that would be a huge boost for US companies and the US economy, which would send a lot of inflation out globally,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

“But it seems more of a slow process, particularly with the Obamacare repeal that’s fallen through.”

Summerset, the retirement village operator, fell 2.9 per cent to $4.98, leading the index lower. Trade Me, the auction website, fell 1.5 per cent to $5.10, while Metro Performance

Glass fell 2.1 per cent to $1.42. Metro has dropped 26 per cent this year.

McIntyre said both companies were exposed to an intensely competitive building sector, with more businesses chasing work put out to tender and a shortage of labour.

“It’s all very well winning a tender but it has to be profitable.”

Fletcher Building fell 0.5 per cent to $7.92 and has fallen 25 per cent so far this year. Goodman Property Trust rose 1.7 per cent to $1.22 after the industrial and commercial property investor said an independent valuation had added $115m to the value of its property portfolio, which now stands at more than $2.4 billion and will be reflected, subject to audit, in the group’s full-year results.

A2 Milk was the biggest gainer on the NZX 50, rising 4.2 per cent to $2.95. McIntyre said both A2 and honey products maker Comvita had benefited from China’s decision to delay changes to its rules for e-commerce, where quantities of both companies’ products trade on the so-called grey market. Comvita shares rose 1.2 per cent to $8.50.

TeamTalk rose 8 per cent to 93c. The telecommunications minnow has been in a war of words with suitor Spark New Zealand after independent adviser Grant Samuel & Associates found the underlying value of TeamTalk was $1.52 to $2.11 a share — well above Spark’s 80c offer. Further muddying the takeover, TeamTalk announced on Friday that it had agreed to sell a 70 per cent stake in its Farmside rural internet services provider to Vodafone NZ for $10m, almost half what Spark is willing to pay for the entire group. Spark rose 0.4 per cent to $3.405.

Fonterra Shareholders’ Fund fell 1.5 per cent to $6.06 and Metlifecare fell 1.3 per cent to $5.95.