MARKET CLOSE: NZ shares fall, Air NZ and Trustpower drop while Metro Glass gains

New Zealand shares dropped as an Australian public holiday saw a quiet day where the benchmark index fell, led lower by Air New Zealand and Trustpower, while Metro Performance Glass gained.

The S&P/NZX50 Index dropped 58.36 points, or 0.7 percent, to 8,311.42. Within the index, 23 stocks fell, 18 rose and 9 were unchanged. Turnover was $71.7 million.

"With Australia closed for Australia Day there's not as much activity, and there might be a few people heading off early for the long weekend so it does feel like it's a bit subdued out there," said Mark Lister, head of private wealth research at Craigs Investment Partners. "We're also pretty close to reporting season, a lot of people are just watching and waiting. You'd still call it a pretty quiet start to the year in terms of activity and returns."

Air New Zealand led the index lower, down 2.7 percent to $2.91. The stock has suffered as crude oil prices have steadily risen.

Trustpower dropped 2.6 percent to $5.57. Yesterday, it said it was considering a proposal by cornerstone shareholder Tauranga Energy Consumer Trust which would, in effect, move all the trust's assets into a separate charitable trust and wind it up. The trust owns 26 percent of Trustpower and distributes the bulk of its income to the power company's Tauranga and Western Bay of Plenty customers, money which would instead be used to fund community projects.

"That's not surprising, they've enjoyed a very firm grip on their Bay of Plenty customers for years now because of the situation with the trust, and that potentially changing means other companies might have a better chance of pinching a few customers and Trustpower might have to compete a little harder on the pricing front," Lister said. "The market sees uncertainty, and potentially a bit of an earnings impact in the years ahead, so that's the natural reaction."

Infratil, which is Trustpower's controlling shareholder, was unchanged at $3.22.

The best performer was Metro Performance Glass, which rose 3.3 percent to 94 cents, with Argosy Property up 1.9 percent to $1.08 and Pushpay Holdings gaining 1.2 percent to $4.23.

Outside the benchmark index, Wellington Drive Technologies rose 0.6 percent to 17.6 cents. It won't meet 2017 earnings guidance after disappointing revenue in the fourth quarter, and has some supply concerns but remains positive about 2018.

The Auckland-based company, which makes energy efficient motors for commercial refrigerators, previously downgraded annual revenue growth guidance after a weaker third quarter to the lower end of, or possibly below, a 25 percent to 35 percent range. It said today it had seen growth of 22.6 percent. Earnings before interest, tax, depreciation and amortisation (ebitda) in 2017 was an improvement on 2016, but below $1 million, it said.

(BusinessDesk)