Market close: NZ sharemarket falls after late dip

Fletcher Building was up 7c to $7.14. Photo / Supplied

Fletcher Building lit up a quiet day on the New Zealand sharemarket by recommencing its share buy-back programme and eventually returning money to shareholders.

The S&P/NZX 50 Index had a late dip, falling 61.83 points or 0.47 per cent to 13,104.61, after reaching an intraday high of 13,166.44.

There were 64 gainers and 74 decliners across the whole market on low volume of 35.34 million share transactions worth $132.12 million.

Fletcher Building was up 7c to $7.14, hitting an intraday high of $7.28, after providing a notice that it has bought a further 209,701 of its shares on-market for an average of NZ$7.06 and A$6.71 a share.

Fletcher told the market in late May that it would buy back more than 40m shares – it might take up to 12 months - and return $300m to shareholders because of its strong balance sheet. Its previous buy-back notice was issued on June 22.

Shane Solly, portfolio manager with Harbour Asset Management, said trading volumes were very low and Fletcher being active in the market again provided interest. "They have developed a strategy: 'We are well capitalised, our share price is undervalued, and we are returning money to the shareholders'."

Solly said globally there were some positives coming through. Energy prices have pulled back after the Russians decided to supply more gas to Europe through Ukraine. "This is important as it takes some pressure off inflation as central banks think about tightening their monetary policies.

"In Asia we have seen the first consolidation of the Chinese property sector with Evergrande's major shareholder Chinese Estates Holdings going private," he said.

There was also plenty of talk about 2degrees pausing its initial public offer (IPO) and possibly merging with fellow telecommunications company Vocus NZ. Trilogy International Partners, 2degrees' majority owner, went into a trading halt on the Toronto Stock Exchange. A merger would create a $2.3 billion company to compete against Vodafone NZ and Spark.

Solly said both 2degrees and Vocus were quite a way down the path of investor presentations and there was enough interest to do the IPOs. "We will look forward to seeing what comes out of this, and there would be investor interest in a combined business."

At home, Fisher and Paykel Healthcare rebounded 14c to $30.38; Freightways was up 13c to $12.78; Ebos Group gained 20c to $35.30; and SkyCity Entertainment increased 4c to $3.29. Carpet maker Bremworth rose 4c or 5.26 per cent to 80c.

Mainfreight was down $1.30 to $93.60; Auckland International Airport declined 7.5c to $8; Spark decreased 7c to $4.67; Port of Tauranga fell 11c to $6.88; Fonterra Shareholders' Fund shed 12c or 3.02 per cent to $3.86; and Air New Zealand was down 1.5c to $1.70.

The a2 Milk Company shed a further 14c or 2.19 per cent to $6.24 amidst continuing investor uncertainty. Solly said a2 has again come under pressure as the investors consider the risk of the class action against them in Australia.

"They are also waiting for an update which a2 Milk will provide at its investor day in just over two weeks."

Scales Corporation fell 10c or 1.85 per cent to $5.30; Serko decreased 11c to $7.88; Seeka fell 10c to $5.08; DGL Group lost 13c or 4.41 per cent to $2.82; and South Port New Zealand was down 13c to $9.37.

Mercury Energy told the market five turbines at the Tararua Wind Farm 3 near Palmerston North will be out of action for several weeks because of a small fire on one of the turbines. Mercury's share price was down 13c or 2.01 per cent to $6.33.

Contact Energy declined 13c to $8.10; Meridian was down 5c to $4.90; Trustpower lost 10c to $7.20, while Genesis rose 5.5c to $3.345.

AMP increased 4c or 3.74 per cent to $1.11; Radius Residential Care was up 2c or 3.92 per cent to 53c; and Enprise Group gained 5c or 2.66 per cent to $1.93.

Among the leading banks Westpac Banking Corporation was up 44c to $27.32, and ANZ Banking gained 22c to $29.16, but Heartland Group Holdings fell 5c or 2.14 per cent to $2.29.

Just Life Group rose 3c or 3.9 per cent to 80c after buying Intenza New Zealand, with its Herbal Ignite Max and Prostate Power Flow brands, to join its healthy living division. Just Life said the Auckland lockdown will have an adverse impact on its half-year result ending December.

Software firm Geo rose 1.1c or 6.32 per cent to 18.5c after raising the first $2.6m of the planned $6m, priced at 13c a share. The second placement requires shareholder approval.