Shares fall as a2 Milk extends decline
New Zealand shares fell as a2 Milk Co continued its decline since its chief executive sold down her holding. Rising bond yields also dimmed the lustre of property stocks.
The S&P/NZX 50 index dropped 63.45 points, or 0.7 per cent, to 9286.40. Within the index 36 stocks fell, seven gained, seven were unchanged. Turnover was $120.9 million.
The local market followed Wall Street’s lead after the Federal Reserve raised its key interest rate. Global bond yields have been increasing since US President Donald Trump introduced smaller tariffs on Chinese goods than earlier feared. New Zealand’s 10-year government bond yield has climbed 13 basis points to 2.91 per cent in the past fortnight.
Rate-sensitive property stocks were weaker after the Fed’s move and as New Zealand’s Reserve Bank held the official cash rate at 1.75 per cent. Goodman Property Trust fell 2.2 per cent to $1.535, Vital Healthcare Property Trust declined 0.9 per cent to $2.12, Kiwi Property Group decreased 0.8 per cent to $1.40 and Precinct Properties New Zealand slipped 0.7 per cent to $1.44.
“We have seen bond yields rise a little in New Zealand this month and more so globally,” said Matt Goodson, managing director at Salt Funds Management. “Their run over the past few days has been a little bit incongruous and they’re certainly giving that back in a hurry.”
A2 fell 2.4 per cent to $11.57. It’s shed 7.5 per cent since CEO Jayne Hrdlicka disclosed a share sale at a time when the stock was being added to the FTSE index at the end of last week. Meridian Energy shed rights to dividends of 11.38c per share. It led the market lower, falling 3.6 per cent, or 12c, to $3.205. Skellerup Holdings declined 2.7 per cent, or 6c, to 2.14, giving up a 7c dividend. Ebos Group fell 0.5 per cent to $22.25, or 10c, after shedding rights to a 35.5c dividend. NZX posted the biggest gain for the day, up 1.9 per cent to $1.10. Tourism Holdings increased 1.2 per cent to $5.75 and SkyCity Entertainment Group
advanced 1 per cent to $3.97. Among blue-chip stocks, Fletcher Building was unchanged at
$6.49, Fisher & Paykel Healthcare slipped 0.3 per cent to
$14.85, Auckland International Airport decreased 0.5 per cent to $7.35, and Spark New Zealand fell 2 per cent to $3.93. Gentrack was unchanged at $7 after Forsyth Barr started covering the stock, rating it an “outperform” with a target price of $7.90. Outside the benchmark index,
Tilt Renewables was unchanged at $2.33. The independent directors again recommended minority shareholders reject a $2.30 a share offer from Infratil and Mercury NZ.
Infratil fell 1.5 per cent to $3.505 and Mercury slipped 0.9 per cent to $3.34. Cavalier Corp dropped 7.6 per cent to 61c after the carpet maker said it will sell its stake in a wool scouring business at an $11.8m loss.