Market close: Contact, Meridian Energy drag NZX down

Contact fell 36c or 4.44 per cent to $7.74 and Meridian declined 25c or 4.24 per cent to $5.65. Photo / 123RF

Contact and Meridian Energy finished their golden run-up to being re-valued on a global index, dragging the New Zealand sharemarket down another near-half per cent on heavy trading.

The S&P/NZX 50 Index lost 53.57 points or 0.43 per cent to 12,433.16 after falling 0.45 per cent the day before. But the index was up 1.24 per cent for the week. There were 74 gainers and 64 decliners over the whole market, with 90.6 million shares worth $384.11 million changing hands.

Contact fell 36c or 4.44 per cent to $7.74 on the big trading of 14.5m shares worth $112.5m, and Meridian declined 25c or 4.24 per cent to $5.65 on 23m shares worth $130m. Mercury was also down 10c to $5.40.

Harbour Asset Management portfolio manager Shane Solly said Meridian and Contact would overnight have "a weighting uplift" on the iShares Global Clean Energy Exchange Traded Fund. "This increases their liquidity and investors have been purchasing in advance of the index change."

American global investment manager BlackRock Inc, for instance, increased its stake in Contact to 7.44 per cent, from 6.41 per cent. "Both stocks have had strong runs lately – Contact moved from $6.20 and Meridian from $4.65 in late September," Solly said. "They have gone from the outhouse to the penthouse in a short period of time, and they are now giving some back with profit-taking."

Mainfreight, bubbling with increased business activity, continued its glorious run, climbing $1.85 or 3.55 per cent to another new peak of $53.90. Fisher and Paykel Healthcare was up 34c to $35.20 but a2 Milk slipped 9c to $15.66.

Retirement village operator Oceania Healthcare gained another 3c or 2.16 per cent to $1.42, having increased a third in price over the past three weeks. Competitors Summerset Group Holdings was up 2c to $10.32 and Arvida gained 3c to $1.82.

Ebos Group was down 7c to $26.80, Auckland International Airport fell 24.5c or 3.29 per cent to $7.20, and Hallenstein Glasson decreased 18c or 2.94 per cent to $5.94.

Scott Technology rose 5c or 2.66 per cent to $1.93, Serko was up 16c or 3.17 per cent to $5.20, and The Warehouse climbed 15c or 6.91 per cent to $2.32, with three brokers putting out positive research notes. "The sentiment is that The Warehouse is doing a better job and is engaging online," Solly said.

SkyCity Entertainment sent out mixed signals at its annual meeting and its share price fell 5cc to $3.11. SkyCity told its shareholders that the Hamilton, Queenstown and Adelaide casinos were trading ahead of expectations. Online casino trading was positive but the outlook remains unpredictable for the 2021 financial year as "we adjust to new social and economic settings". SkyCity is providing a trading update in mid-November.

Allied Farmers rose 7c or 11.29 per cent to 69c after the rural services group announced it was supporting a new listing, New Zealand Rural Land Company (NZRLC), which will be making an initial public offering of up to $150m next month.

Allied Farmers is taking a 50 per cent stake in New Zealand Rural Land Management (NZRLM) for $2.5m and the newly-established NZRLC is the manager. NZRLC will buy rural land and will be leased to farmers. Allied Farmers has an option to purchase the remaining 50 per cent of NZRLM after two years.