Predicted US rate increases see foreign buyers repatriating funds while Metro Glass reports lower revenue
New Zealand shares fell, led by Metro Performance Glass after it missed prospectus sales forecasts. Spark New Zealand and Fletcher Building declined as overseas investors repatriated funds back home.
The NZX 50 Index fell 37.917 points, or 0.7 per cent, to 5757.938. Within the index, 28 stocks fell, 14 rose and four were unchanged. Turnover was $135 million.
Metro Glass dropped 4.9 per cent to $1.75. The company, which has more than half New Zealand’s glass processing market, reported profit ahead of its prospectus forecast at $9.6 million in the eight months ended March 31, while revenue was 2.4 per cent lower than expected at $115 million, which it attributed to capacity constraints in the building industry. Chairman John Goulter said delays in both residential and commercial markets could weigh on Metro Glass’ earnings for the next six months, and make achievement of its prospectus revenue target “challenging”, with a lower peak in construction work, even if it lasted longer.
“It’s more their lack of certain guidance with their outlook,” said James Smalley, director at Hamilton Hindin Greene. “It’s the glass halfempty/half-full, because what you’ve got is going to be longer but not as high,” he said, referring to the construction pipeline.
Possible rate hikes in the United States dampened investors’ appetite for local equities, with foreign investors typically buying New Zealand stocks for their relatively high yield.
Spark declined 3.8 per cent to $2.635, its lowest level in exactly a year. Fletcher Building fell 0.5 per cent to $8.60. Ryman Healthcare slipped 1.2 per cent to $7.71.
“Spark, with its liquidity and size, is generally the one that’s got the most exposure to foreign investors,” Smalley said. “What we’re seeing is investors repatriating a bit of cash back to the States ahead of any potential rate rise. It seems to be a lot of the large cap stocks that have come in for selling.”
Mainfreight rose 0.3 per cent to $15.95. The transport and logistics group beat its annual profit guidance and said earnings would rise further in the coming year.
The company said profit excluding abnormal items rose 7.7 per cent to $83.5 million in the year ended March 31, ahead of its forecast range of $80 million to $83 million.
SkyCity Entertainment Group gained 1.8 per cent to $4.43. The company says group revenue is up 17.9 per cent to $415.6 million for the second half of the 2015 year to date, accelerating from the pace of sales growth posted in the first half. Updating the market, it said it would not know for another month or so if resource consents for the convention centre would be non-notified or not, with a notified consent adding six months to the process.
Outside the benchmark index, Turners was unchanged at 31c. The lender and insurance company more than doubled annual profit to $18.1 million, beating guidance, reflecting its car auction house acquisition and its financing businesses performing ahead of forecast.