NZ shares drop, Heartland and Ryman fall

The NZX ticker on the building downtown. Photo / File

New Zealand shares continued to drift with Heartland Bank and Ryman Healthcare dropping, while Tower and Kiwi Property Group gained.

The S&P/NZX50 Index dropped 25.84 points, or 0.4 per cent, to 6,850.2. Within the index 28 stocks fell, 18 rose and five were unchanged. Turnover was $135.4 million.

Heartland Bank fell 1.3 per cent to $1.51. The stock's trading halt has been lifted after the bank raised $20m from institutional investors at $1.46 per share, a 4.6 per cent discount to the last trading price.

A share purchase plan, which will offer New Zealand-resident shareholders up to $15,000 worth of shares each, will be finalised after February next year, the bank said, with funds raised to help maintain the lender's capital ratio after a period of strong credit expansion and support its digital strategy.

"It has gone very very well, they've managed to raise $20m and the stock's only two cents off so it shows you there was very good demand for the stock," Smalley said.

Ryman Healthcare was the worst performer, down 2.2 per cent to $8.33, while Freightways dropped 2.2 per cent to $6.80 and Metro Performance Glass fell 2 per cent to $1.93.

Orion Health Group dipped 0.5 per cent to $2.14, ending a run of gains after it hit a record low $1.65 on Thursday.

"I think what possibly happened is on that Thursday a large cross was put through - someone crossed the best part of 800,000 shares around its lows, they drove the price down and once that sell order completed quite often you do see a stock bounce back up," Smalley said. "It's been an interesting ride for that stock, not for the faint of heart. That IT sector has generally been very disappointing for investors, hopefully, 2017 will be a lot better. The original Xero's up pretty well, but subsequent issues have ended up being rather poor investments."

Tower rose 1.2 per cent to 86.5 per cent. It has gained 24.5 per cent since hitting a record low 69.5 cents at the end of November, when it said it will separate its liabilities and receivables from the Canterbury earthquakes into a separate 'bad bank' structure and "aggressively pursue" recoveries from the EQC and reinsurer Peak Re that amount to about $101m.

"It's interesting to note their bounceback, maybe investors are happy with their proposals to separate the company," Smalley said. "It has been an extremely poor performer and people will be hoping they've finally got a handle on those ongoing earthquake liabilities. It has eaten away significantly at their capital. There has been talk in the Australian media it might be a takeover opportunity, maybe that's why they're trying to separate out those two businesses."

Property for Industry was the best performer, up 1.3 per cent to $1.57, and Vital Healthcare Property Trust gained 1.3 per cent to $2.025.

Kiwi Property Group rose 0.7 per cent to $1.37. The country's biggest listed property investor has put forward a deal to take over the management of NPT that would see it sell two Wellington properties to the smaller company, and has won the backing of the target's board, trumping a rival bid by Augusta Capital.

NPT shares last traded at 65 cents, down 3.7 per cent this year, while Augusta shares gained 1 per cent to $1.02, and were up 1 per cent this year. Both shares trade outside the NZX50.

Also outside the main index, OceanaGold Corp advanced 2.3 per cent to $3.99. It expects increased gold production at a cheaper cash cost in 2017 as its Haile gold mine in the US comes on stream, providing higher margins. Last month OceanaGold said it would leave the NZX at the end of the year to try and cut costs, keeping its listings on the ASX and Toronto stock exchange.