Trade Me, Air NZ lead decline as market falls for second day

New Zealand shares fell for a second day, correcting a market some traders say has become overvalued, with Trade Me Group and Air New Zealand among the biggest decliners.

The S& P/ NZX 50 Index dropped 66.13 points, or 0.9 per cent, to 7,468.59. Within the index, 29 stocks fell, 11 rose and 10 were unchanged. Turnover was $ 122 million.

The benchmark index has gained 19.1 per cent this year and hit a record high of 7571.1 on Wednesday as investors chase yield in a world of low interest rates.

“We’ve seen a continuation of profit taking in a number of our stocks, a healthy market does undertake these corrections from time to time,” said Grant Williamson, director at Hamilton Hindin Greene.

Trade Me was the worst per- former, down 6.7 per cent to $ 5.45, while Air New Zealand dropped 5.3 per cent to $ 2.045.

New Zealand Refining fell 4.3 per cent to $ 2.22, Auckland International Airport was down 3.5 per cent to $ 7.355, and Ebos Group declined 2.7 per cent to $ 18.35.

Some of the moves are large, but need to be seen in the context of the gains seen so far this year, Williamson said. Despite yesterday’s selling, Trade Me is still up 34.5 per cent this year and Auckland International Airport has gained 32.5 per cent.

The best performer was Steel & Tube Holdings, up 1.3 per cent to $ 2.31. It has gained 4 per cent since Monday when it was announced it would drop out of the S& P/ NZX50 benchmark index on September 16.

Fletcher Building gained 0.7 per cent to $ 11.10, and is up nearly 50 per cent this year. Strong construction demand has stoked interest in the building and construction company, which last month reported a 71 per cent gain in full- year profit to $ 462m and met its earnings guidance.

Trustpower rose 0.1 per cent to $ 7.95. The shareholders have overwhelmingly voted to carve out its windfarms and renewable develop- ment pipeline, splitting the company into two separate businesses that will be listed on the NZX and ASX.

Outside the main index, Veritas dropped 6.9 per cent to 27c. The li sted hospitality company, which owns the Mad Butcher franchise and Nosh Food Markets, has agreed a deal with its bank to reduce debt repayments and reschedule its debt.

Wellington Merchants, formerly known as Kirkcaldie & Stains, was unchanged at $ 3.44. The directors have recommended its shareholders accept Sir Ron Brierley’s latest takeover offer, with the t wo largest shareholders indicating they will do so. Brierley’s Mercantile NZ has offered $ 3.45 per share, an uplift from his previous offers of $ 2.75 and $ 3 made in March and June, respectively.

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