MARKET CLOSE: Shares fall; Spark, Fletcher decline on weak Kiwi

New Zealand shares fell, as offshore investors sold blue-chip equities, such as Spark NZ and Fletcher Building, in the face of a declining dollar. MightyRiverPower, Genesis Energy and Contact Energy rose on the prospect of lower interest rates.

The NZX 50 Index dropped 11.445 points, or 0.2%, to 5846.968. Within the index, 23 stocks fell, 17 rose and 10 were unchanged. Turnover was $114 million.

The local currency declined sharply yesterday after Reserve Bank governor Graeme Wheeler surprised parts of the market by cutting the official cash rate 25 basis points to 3.25%. Offshore investors sold liquid kiwi stocks to repatriate funds home. Spark, formerly Telecom Corp, dropped 2.6% to $2.765. Fletcher, the country's largest listed company, declined one percentage point to $8.53.

"There's a strong view in the market that our currency will continue to weaken," said Mark Lister, head of private wealth research at Craigs Investment Partners. "The international investors are really only interested in those very large, liquid stocks. Spark is one of them, and it happens to be down. Fletcher Building as well, one of our bigger more liquid stocks, is down."

Fisher & Paykel Healthcare climbed 1.7% to a fresh record of $7.11. The breathing apparatus manufacturer and exporter benefits from a weaker kiwi as it translates offshore earnings back into the local currency.

Stocks held for their dividend, such as utility companies and property investors, gained as lower interest rates saw investors search for yield. MRP rose 1.5% to $2.785. Contact gained 0.6% to $5.43. Genesis advanced 1.6% to $1.89. Meridian Energy increased 0.7% to $2.215. Kiwi Property Group climbed 0.4% to $1.26.

"Some of the high-yielding stocks are performing well," Mr Lister said. "With interest rates being cut yesterday, that certainly surprised a few of us in the market, and there is an expectation that rates will continue to come down so some of those better quality, high-yield stocks are getting a bit of support today."

Metlifecare rose 0.2% to $4.90. Chief executive Alan Edwards announced plans to retire in 2016, ending six years heading up the retirement village operator.

On the New Zealand Alternative Index, TruScreen fell 3.7% to 26 cents. The cervical cancer test developer posted a small loss of $692,000 in the 12 months ended March 31 on revenue of $1.57 million, in its first annual filing as a listed company, and has lined up China to underpin growth, having achieved regulatory approval and several supply deals in the world's most populous nation.

VMob rose 2.6% to 40c after the mobile voucher developer increased its annual loss to $4.4 million, from $2 million a year earlier, as it forgoes profit and chases sales growth through key global customers. Revenue for the company skyrocketed to $2.3 million from $385,000 a year earlier. Meanwhile, its annualised committed monthly revenue, a key metric for software as a service companies, increased some 1700% to $3.2 million.

Enprise Group dropped 8% to 46c after the accounting software reseller posted an annual profit of $232,000 from an earlier loss of $231,000, in its first filing on the NZAX as it places greater emphasis on the New Zealand market, where it derives most of its revenue.

Snakk Media fell 5% to 7.6c. The company, which helps brands find and reach consumers using apps, games and social media on their smartphones, tablets and other smart screens, lifted annual sales 40% as it pushed into Southeast Asia, and fattened gross margins through the second half of the year, while its loss more than doubled to $4.26 million.

(BusinessDesk)