A2 Milk’s tumble keeps stocks in red

Dividend payers the best performers as OCR awaited

New Zealand shares fell, as a seven-month low for A2 Milk outweighed the revival in appetite among investors for high-yielding stocks such as Meridian Energy and Chorus.

The S&P/NZX 50 Index fell 14.62 points, or 0.1 per cent, to 10,858.71. Within the index, 21 stocks fell, 26 rose and three were unchanged. Turnover was $102.1 million.

A2 led the market lower, down 3.1

per cent at $13.28 on a volume of 608,000 shares, less than its 90-day average of 822,000. The milk marketing firm has been on the back foot since China Mengniu Dairy Co announced a A$1.5 billion takeover bid for Bellamy's Australia, raising the spectre of a tougher competitor for A2.

Sky Network Television gave up some of Monday’s gain in relatively busy trading, down 0.9 per cent at $1.15, with 1.8 million shares changing hands. The pay-TV operator rose on Monday amid a torrent of news about

Spark New Zealand’s live-streaming issues over the weekend.

Spark was the most traded stock on a volume of 3.5 million shares, compared to its 90-day average of 3.3 million. It rose 1.4 per cent to $4.49, continuing to defy bad publicity over its Rugby World Cup coverage at the weekend. The telco said its streaming service performed well for Monday night’s matches.

“The stock has been knocked around,” said Chris Timms, an investment adviser at Craigs Investment Partners, adding that its strength was interesting given the stock recently paid a dividend.

Timms said dividend payers were key to investors at present. Meridian posted the day's biggest gain, up 2.1 per cent at $5.25 on a volume of 973,000 shares.

Chorus rose 1.5 per cent to $5.15, having shed rights to its dividend on Monday.

Investors will be looking ahead to today’s Reserve Bank announcement on the official cash rate, Timms added. While there is not expected to be a change, the commentary will be important, he said. Summerset Group rose 1.3 per cent to $6.47 after the retirement village operator said it’s proceeding with its Australian expansion plans with the purchase of land in Melbourne.

Ryman Healthcare, which already has villages in Australia, fell 0.5 per cent to $13. Metlifecare dropped 2 per cent to $4.37.

Air New Zealand was down 0.2 per cent at $2.68 after the national carrier said it has signed contracts for its multi-billion-dollar purchase of eight Dreamliner 787-10 aircraft. The deal needs a simple majority at today’s annual meeting, although the Crown has indicated it will vote its 51.9 per cent in favour. Outside the benchmark index,

Tower fell 5.8 per cent to 72.5c. The insurer yesterday said it plans to raise $47.2 million at 56 cents a share to fund a $13m acquisition of Youi NZ’s 34,000 policies, and to strengthen its balance sheet.

Comvita rose 0.9 per cent to $3.31 after telling NZX Regulation it complied with disclosure rules. The honey products maker got a ‘please explain’ note from the stock market supervisor after its price jumped 21 per cent in two trading sessions.