Investors still selling as index slides a fraction at month end

Z shares fell, led by Trade Me Group while Summerset Group gained on its positive earnings out- look.

The S& P/ NZX50 index dropped 13.31 points, or 0.2 per cent, to 6928.64. Within the index, 18 shares rose, 17 fell and 16 were unchanged. Turnover was $ 124.7 million.

“There still seems to be a weight of selling in the marketplace, after the past three- or four- odd weeks of experiencing some downside,” Grant Williamson, director at Hamilton Hindin Greene, said. “It will be interesting to see next week whether the start of a new month turns things around.”

Trade Me Group led the index lower, down 3.4 per cent to $ 4.88, and has dropped almost 17 per cent since The New Zealand dollar fell amid a global bond sell- off, paced by US Treasuries, that pushed the yield on the 10- year benchmark US bond to a five- month high and drove up the greenback.

The kiwi fell to US71.36c at 5pm yesterday from US71.51c late on Thursday. The tradeweighted index was little changed at 77.07.

The yield on 10- year US Treasuries rose as high as 1.87 per cent overnight Thursday, the highest since late May according to Reuters data, after stronger- than- expected UK economic growth figures.

The yield on New Zealand’s 10- year government bonds reached 2.73 per cent, the highest since late May.

The kiwi traded at 58.59 British pence from 58.54 pence late on Thursday and slipped to 4.8382 yuan from 4.8462 yuan late on Thursday when the yuan was fixed at a six- year low of 6.7921 yuan per US dollar.

It dropped to 65.44 euro cents from 65.61 cents and rose to 75.03 yen from 74.68 yen. It gained to A93.97c from A93.76c on Thursday. its record high of $ 5.86 reached at the beginning of September.

“It has been trending downwards for a while now. It doesn’t seem to be the market darling like it once was,” Williamson said. “Investors are concerned about where growth is going to come from, whether it’s reached saturation point.”

A2 Milk Co fell 3 per cent to $ 1.92, Stride Property dropped 2.1 per cent to $ 1.85, and Australia & New Zealand Banking Group fell 2 per cent to $ 29.40.

Scales Corp was the best performer, up 3.7 per cent to $ 3.10, while Metlifecare rose 3.2 per cent to $ 5.79. Summerset Group gained 2.3 per cent to $ 4.86. The retirement village company says earnings will rise by as much as 46 per cent this year as it benefits from strong sales in a nation with an ageing population.

The Wellington company anticipates underlying profit of between $ 53 million and $ 55m in calendar 2016, but didn’t give guidance on net profit.

“It’s a record quarter for it and it’s got some good earnings guidance, though it’s coming well off its high. It was up at $ 5 earlier this year,” Williamson said.

Outside the benchmark index, Intueri Education Group gained 35.6 per cent to 8c. It lowered its 2016 earnings guidance, saying deeper cost cuts and the decision to sell its dive school aren’t enough to offset weaker enrolments and one- time restructuring costs.

AWF Madison Group rose 3.8 per cent to $ 2.44. The country’s largest contract labour company lifted first- half profit 15 per cent to $ 3.9m, which it said reflected improved productivity that has continued into the second half.

OceanaGold Corp dropped 2.3 per cent to $ 4.24. The gold miner’s third- quarter profit soared 345 per cent to US$ 30.7m as it expanded its operations. Revenue rose 37 per cent to US$ 150 million.

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